Aldi, the UK’s best value supermarket, has pledged to invest a record £1.3 billion over the next two years (2020-2021) with new and upgraded stores, distribution centres and further innovations across its business.
The plans are expected to create a further 4,000 new jobs next year, adding to the 3,000 permanent roles already created in 2020.
The supermarket, which celebrates its 30th anniversary in the UK this year, said its continued investment in Britain was “recognition for three decades of trust and loyalty” shown by its growing base of loyal customers.
In its annual trading update, Aldi said an influx of new shoppers had helped it increase sales in the UK and Ireland by 8.3% to a record £12.3 billion in the year to 31st December 2019 (2018: £11.3bn), despite the grocery market growing by just 1% overall**. Latest data shows Aldi’s UK sales have continued to rise by 10.0%, with its market share standing at 8.0%****. The total number of customers now shopping with Aldi stands at more than18 million****.
The group, which reported a drop in profits in 2018, saw margins improve last year, with efficiencies of scale offsetting continued investment in prices.
Under its investment plan, Aldi expects to open around 100 new stores across the UK over 2020 and 2021 in line with its long-term target of 1,200 stores by 2025, alongside over 100 store upgrades under its Project Fresh initiative. Other investments include new and expanded distribution centres and the rollout of recent innovations and developments, including its new ‘click and collect’ service which was successfully piloted and launched to customers last week.
Looking ahead, Aldi said its most important commitment to customers was to continue to keep its prices the lowest in the market as household budgets come under greater pressure.
According to The Grocer magazine, a basket of 33 everyday items at Aldi is on average 14% cheaper than the Big 4 supermarkets, whilst the monthly price comparison survey by Which? for August showed Aldi to be 19% cheaper on a trolley of 74 household goods*****.
Giles Hurley, Chief Executive Officer for Aldi UK and Ireland, said: “For over 30 years, our success has been driven by the ever-increasing number of shoppers who put their trust in Aldi every time they shop with us. This is what enables us to keep investing in Britain – in our products, our prices, our people and in the communities we serve.
“The founding principle of our UK business back in 1990 was to offer a carefully-selected range of great quality products at the lowest prices. Whilst we’re continuing to innovate to give customers an even better experience and greater convenience, our core philosophy remains unchanged.
“With the UK’s economic outlook increasingly uncertain, families are more concerned about their grocery bills than ever. We’ve seen before that our customers need us most in times of financial hardship, which is why our commitment to remain Britain’s lowest-priced supermarket is more important than ever.”
Commenting on the supermarket’s response to the Coronavirus outbreak earlier in the year, he added: “The response to the challenge presented by the Covid-19 pandemic was both heroic and historic.
“As ever, our 36,000 colleagues and thousands of suppliers rose to the challenge of feeding the nation with tremendous skill and courage, whilst the British public displayed remarkable patience and compassion. If there is a positive to take from the situation, it’s that supermarkets, suppliers and shoppers can overcome the greatest of challenges when we work together.”
Aldi, which sources its entire core range of fresh meat, eggs, milk, butter and cream from British suppliers, said it had spent an extra £1 billion with UK companies last year taking its total to £8 billion. Earlier this year, Aldi topped the Groceries Code Adjudicator’s annual GSCOP supplier survey for the seventh successive year, underlining its commitment to maintaining fair and sustainable practices with its suppliers.
Reaffirming its commitment to quality, Aldi said it had already reformulated around half of its range to improve product quality this year whilst introducing hundreds of new products in line with changing consumer tastes, such as its very own hard seltzer with the launch of Nordic Wolf, Haysmith’s Raspberry & Redcurrant Pink Gin, Plant Menu vegan pizza, the No Steak Bake, British Wagyu steaks and its Lyme Block English Rosé made in South Devon.
Earlier this year, Aldi maintained its position as the UK’s best-paying supermarket by increasing the minimum hourly rates for store colleagues to £9.40 nationally and £10.90 inside the M25. These rates increase to £10.41 nationally and £11.15 in London after just two years.
More recently, it committed to halving the volume of plastic packaging it used by 2025 by removing over 2 billion pieces of plastic from circulation.
The supermarket also extended its partnership with Teenage Cancer Trust – its adopted charity since 2017 – for a further five years after hitting its £5 million target 18 months ahead of schedule.
*Group figures comprise UK & Ireland
**Source: Kantar Worldpanel data, 52 weeks to 29 December 2019
***Re-stated in line with FRS 102 Triennial Review accounting standards – previously reported as £197.9m
**** Kantar Worldpanel data, 12 weeks to 06 September 2020
*****The Grocer 33 price survey, published 21st August 2020; Which? Supermarket price comparison for August, published 8th September 2020
Aldi has committed to remove single-use plastic from all its own-brand tea bags by the end of 2021.