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Aldi UK's Trading Accelerates As Shoppers Seek Savings

The British arm of German discounter Aldi has reported a 79% slump in 2021 operating profit but said trading had accelerated over the past six months as pandemic restrictions were lifted and shoppers sought savings to tide over a cost of living crisis.

Privately owned Aldi, which earlier this month overtook Morrisons to become Britain's fourth-biggest supermarket group, said operating profit fell to £60.2 million ($63.8 million) in 2021 from £287.7 million in 2020.

The profit fall was blamed on investment to keep prices low, higher staff costs and COVID-19 related expenses. Sales rose 0.9% to £13.645 billion.

"Preserving our price discount and rewarding our people will always be more important to us than short-term profit," said Giles Hurley, CEO.

"Being privately owned means we can keep our promises even when times are tough."

Pandemic Impact 

Aldi and rival discounter Lidl were hurt during the pandemic by the lack of significant online businesses, but have drawn customers from traditional supermarkets as the cost of living crisis has forced them to seek savings.

The latest industry data shows Aldi's sales growth at 18.7% over the 12 weeks to 4 September with market share at 9.3%, the highest in its 32-year history.  

Hurley said the cost of living crisis is 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," he said.

The discounters' performance has forced the traditional major players - market leader Tesco, Sainsbury's, Asda and Morrisons - to compete more aggressively.

Tesco and Sainsbury's both have schemes that match Aldi prices on some products.

Aldi currently trades from 970 stores. It plans to open 16 more before the end of the year - part of a plan to invest £1.3 billion.

It said that its expansion will create over 6,000 jobs this year.

News by Reuters, edited by Donna Ahern, Checkout. For more retail stories, click here. Click subscribe to sign up for the Checkout print edition.

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