Aldi Revenue Increases By €1.5bln In 2017 As It Focused On Expansion
The UK and Irish arm of Aldi increased its revenue by €1.58 billion last year, achieving a total figure of €11.3 billion for the year ending 31 December 2017, a 16% increase on 2016’s figures, according to financial statements filed recently.
The accounts show that Aldi's gross profits increased by 28.6% to €469 million, while its operating profit increased by 25.8% to €298 million.
The discount retailer invested €504 million in cash to fund the acquisition of tangible fixed assets in order to expand its store and distribution network, which was a key focus in 2017.
It opened 74 new stores across the UK and Ireland during 2017, and increased its average number of employees by over 3,000 to 33,123. As a result, its wages and salaries costs rose to €839 million, an increase of 16.7%.
During the year, Aldi generated net cash from operating activities of €507 million, compared to €520 million in 2016, which was used in the group’s investing activities in its store and distribution network.
The group noted that competitive pressure in the two countries is ‘a continuing risk for the group’, but it manages this risk by ‘continually looking to improve the quality and value of its products, to invest in its employees, and to increase its number of stores to gain greater market share’.
The group also said that foreign currency exchange was a major risk to its business, highlighting the impacts on foreign purchases on its Irish operation.
Regarding Brexit, Aldi revealed that it has established ‘appropriate internal resources to consider and mitigate the effect of Brexit on the group’s operations and future financial performance’.
Its directors said that they believe the company’s strong financial position will help support the future growth of the business.
In Ireland, Aldi’s sales growth of 4.5% helped it achieve a record market share of 11.8% in the 12 weeks ending 7 October 2018, according to Kantar Worldpanel research.
The German-based discount retailer also recently announced that it signed the Business in the Community Ireland (BITCI) Low Carbon Pledge, committing to reducing its greenhouse gas emissions by at least 50% by the year 2030.
© 2018 Checkout – your source for the latest Irish retail news. Article by Aidan O’Sullivan. Click subscribe to sign up for the Checkout print edition.