Booming Aldi to open 65 new stores

Discount supermarket Aldi plans to open up to 65 new stores next year as it continues to step up the pressure on the Big Four grocery chains.

The target was revealed as the company announced UK sales of £5.3 billion for 2013, a rise of 36% on a year earlier. Pre-tax profits were 65% higher at a new record of £260.9 million.

The performance, which contrasts with the difficulties facing Tesco in recent months, has helped Aldi to grow its market share to 4.8% in recent weeks. The German-owned business currently has more than 530 outlets in the UK.

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Managing director Matthew Barnes said the pace of growth quickened in the first half of this year, despite the efforts of the major supermarkets in cutting their prices in response to the squeeze on household incomes and competition from the likes of Aldi, Lidl and Waitrose.

Mr Barnes said: "The price cuts have encouraged consumers to think more about what supermarkets charge and have really shown that our everyday low prices can't be beaten."

Aldi opened 42 new stores last year and is on course to open 54 this year, with another 60-65 new stores planned to open in 2015. This will take total UK store numbers to over 600, keeping it on course to have 1,000 by 2022.

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Rapid growth

It recruited 9,000 new members of staff in the UK in 2013, including more than 291 apprentices and 165 graduates. The company expects to have more than 7,000 new workers in 2014, including 500 in apprenticeships and 160 in graduate positions.

Mr Barnes said: "In addition to new store openings, we'll be upgrading existing stores to meet customer demand.

"We're investing over £600 million in our operations over the next two years to support this growth. This means we can grow while always giving customers the service, value and award-winning quality they expect at Aldi."

The Aldi group now has more than 7,000 stores across three continents.

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Drive towards value

Lloyd Harris, who is professor of marketing at Warwick Business School, said: "Aldi's record profit reflects the ongoing drive towards value in retailing.

"If we look at food retailing in the 1990s and the first part of the 2000s, the focus was on generating customer satisfaction and the 'Big Four' trying to out-compete each other for market share. However, if we can categorise the last six or seven years in retailing as anything, it is the era of value."

He added: "While the Big Four have all too often continued to dismiss the actions of such discounters - frequently using the labels 'discounters' or 'no frill retailers' as a means of suggesting lower quality - firms such as Aldi and Lidl have slowly and ever so quietly rewritten the rulebook of food retailing competition."

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