Aldi doubles down on price promise to customers as households face rising costs
Discount retailer Aldi this week (26 September) pledged to continue to provide the lowest grocery prices in the UK to help households meet soaring living costs.
The company attracted 1.5 million extra customers to its stores over the past 12 weeks as squeezed shoppers abandoned traditional, full price supermarkets in search of value for money. It also said more of its existing customers were consolidating their grocery spend and using Aldi as their first and only supermarket choice.
In its annual trading update, Aldi said while sales growth in the UK and Ireland had slowed in 2021, trading had accelerated quickly in the past six months as pandemic restrictions were lifted and rising living costs affected shopping habits.
Latest Kantar data shows sales growing at 18.7% with market share at 9.3% (12 weeks to 4 September 2022) – the highest at any point during its 32-year history, making Aldi Britain’s fourth largest supermarket having recently overtaken Morrisons. The percentage of households shopping at Aldi also rose to 65%, making it Britain’s third most popular supermarket.
It said sales of its Specially Selected range had increased 29% in the last 12 weeks as customers switched from the more expensive supermarkets in search of more affordable, premium quality food.
Aldi said its buying teams were working tirelessly to counter the impact of inflation and maintain its discount against traditional full price supermarkets.
Consumer group Which? recently confirmed Aldi as the UK’s cheapest grocer on a basket of 47 everyday items with a price difference of £13.53 against Tesco, Asda, Morrisons and Sainsbury’s, making them on average 18% more expensive (Which? 6 September).
Aldi, which operates over 970 stores, said it planned to open 16 more before the end of the year. Other investment – part of its ongoing £1.3bn two-year pledge – will include expanding or relocating dozens of existing stores and developing its network of distribution centres and technology infrastructure to support growth.
Its expansion is set to create over 6,000 new jobs this year, adding to the 4,500 permanent roles created last year.
Giles Hurley, chief executive officer for Aldi UK and Ireland, said: “The cost-of-living crisis is worsening, and it’s being felt by millions of households across the UK. It’s in times like these when our customers rely on us the most, which is why we’re focusing on continuing to deliver our longstanding price promise by offering the lowest possible prices in Britain, every single day.
“It’s also a time when Aldi comes into its own. From our carefully selected range to our smaller format stores to our trademark efficiency, we can leverage our unique approach for the benefit of all of our customers.
“Independent research shows our discount is as compelling as ever and that’s why more and more people are switching to Aldi. We will do whatever it takes to maintain our discount to the traditional full price supermarkets and keep grocery prices as low as possible for the millions of customers that shop with us.”
Commenting on last year’s profit reduction, he said: “Preserving our price discount and rewarding our people will always be more important to us than short-term profit. Being privately owned means we can keep our promises even when times are tough.
“It also means we can continue to invest in the UK, with 16 new stores planned over the next 12 weeks alone, including Broadstairs, Luton, Lincoln and New Southgate in London. As well as bringing our award-winning quality and low prices to even more households, this will also help to create thousands of much-needed jobs whilst boosting British farming and manufacturing.”
The supermarket, which pledged to return its business rate relief in full to HM Treasury again, said profits had fallen due to its investment in lowering prices, increasing colleague pay and pandemic-related expenses.
Aldi, which sources its entire core range of fresh meat, eggs, milk, butter and cream from British suppliers, said it had spent an extra £2 billion with UK companies last year taking its total to £11 billion.
Recently named Employer of the Year by The Grocer magazine, Aldi also maintained its position as Britain’s best-paying supermarket after increasing minimum rates for 30,000 hourly-paid colleagues twice this year as part of a £50m investment.
The supermarket said its partnership with community giving platform Neighbourly had now provided over 25 million meals across the UK since it began in 2019.