UK Supermarket, Aldi, has said the cost-of-living crisis has transformed how Britain shops for groceries.
The company, which has attracted around one million more customers to its stores over the past year, said rising living costs had created a shift in attitudes, adding that a ‘new generation of savvy shoppers has turned their back on traditional, full price supermarkets’.
In the 12 months to December 2022, annual sales increased by almost £2bn to £15.5bn (2021: £13.6bn), a new record in its 33-year history, as inflation-hit consumers prioritised value like never before.
The latest data shows sales growing at 17.1 percent, the fastest of any supermarket, with a market share of 10.1 percent. The business said operating profit last year increased to £178.7m (2021: £60.2m), representing a margin of 1.2 percent, noting the year-on-year increase was due to an exceptional prior year when its profit margin fell to an 11-year low of 0.4 percent following significant investment in Covid-related measures.
Aldi, which opened its first store in 1990, overtook Morrisons last year to become Britain’s fourth biggest supermarket, whilst two-thirds of British households now shop with the store. Aldi is the second most popular UK supermarket among households for doing a full weekly shop. This shows how Britons increasingly turn to the discounter for grocery needs.
The recent price comparison by consumer group Which? confirmed Aldi as the UK’s cheapest grocer for the 15th consecutive month, showing the traditional Big 4 are, on average, 15 percent more expensive. Aldi said it had already invested over £350m in price reductions this year across 650 items, with further reductions expected in the run-up to Christmas as inflation continues to fall back. This month, it lowered prices on 55 products across fruit and vegetables, around one-third of the range.
The supermarket, which operates more than 1,000 UK stores, said it planned to open 18 new locations before the end of the year. It recently committed to opening up to 500 more stores across the UK.
It said its investment rate in the UK would increase in the next two years (2023-2024) to more than £1.4bn, including work to expand its distribution and store network and improve existing stores and technology infrastructure to support growth.
Its expansion will create 6,000 new jobs this year, adding to the 6,000 permanent roles created last year.
Giles Hurley, Chief Executive Officer for Aldi UK and Ireland, said that although inflation is easing, households are still under real pressure from higher living costs. As a result, Britain is shopping very differently from 18 months ago, with fewer trips, more own-label products, and switching supermarkets in search of better value.
“We’re seeing a new generation of savvy shoppers who’ve turned their back on traditional, full-price supermarkets in favour of transparent, low prices, which we’re famous for. That’s why we’re still welcoming more and more customers through our doors, people who come to us for our low prices but stay for the award-winning quality of our exclusive brands,” said Hurley.
“Shoppers know they’ll always get more for their money at Aldi. That’s a promise we’ve kept for more than 30 years.”
Hurley continued that there were still communities across the UK that didn’t have easy access to quality, low-price groceries, and that was something Aldi wanted to address through its expansion, with plans to increase our investment even further over the next two years to £1.4bn in new and improved stores and distribution centres, creating thousands of jobs and more opportunities for its 5,000 British suppliers.
