Supermarket Aldi has said the way Britain shops for groceries has been transformed by the cost-of-living crisis.
The company, which has attracted around one million more customers* to its stores over the past year, said rising living costs have created a shift in attitudes, adding that a ‘new generation of savvy shoppers have turned their back on traditional, full price supermarkets’.
In the 12 months to December 2022, annual sales increased by almost £2bn to £15.5bn** (2021: £13.6bn) – a new record in its 33-year history – as inflation-hit consumers prioritised value like never before.
Latest data shows sales growing at 17.1%* – the fastest of any supermarket – with market share at 10.1%*. The business said operating profit last year increased to £178.7m (2021: £60.2m)**, representing a margin of 1.2%, noting the year-on-year increase was due to an exceptional prior year when its profit margin fell to an 11-year low of 0.4% following significant investment in Covid-related measures.
Aldi, which opened its first store in 1990, overtook Morrisons last year to become Britain’s fourth biggest supermarket, whilst two thirds of British households now shop with the store*. Aldi is also the second most popular UK supermarket among households for doing a full weekly shop***, which shows how Britons are increasingly turning to the discounter for all their grocery needs.
The recent price comparison by consumer group Which? confirmed Aldi as the UK’s cheapest grocer for the 15th consecutive month****, showing the traditional Big 4 are on average 15% more expensive. Aldi said it had already invested over £350m in price reductions so far this year across 650 items, with further reductions expected in the run up to Christmas as inflation continues to fall back. Just this month, it lowered prices on 55 products across fruit and veg – around one third of the range.
The supermarket, which operates more than 1,000 UK stores, said it planned to open in 18 new locations before the end of the year. It recently committed to opening up to 500 more stores across the UK.
It said its rate of investment in the UK would increase in the next two-year period (2023-2024) to more than £1.4bn, including work to expand its distribution and store network as well as improving existing stores and technology infrastructure to support growth.
Its expansion will create 6,000 new jobs in total this year, adding to the 6,000 permanent roles created last year.
Giles Hurley, Chief Executive Officer for Aldi UK and Ireland, said: “Although inflation is easing, households are still under real pressure from higher living costs. As a result, Britain is shopping very differently to how it did 18 months ago – fewer trips, more own label products, and switching supermarkets in search of better value.
“What we’re seeing is a new generation of savvy shoppers who’ve turned their back on traditional, full-price supermarkets in favour of transparent, low prices, which is what we’re famous for. That’s why we’re still welcoming more and more customers through our doors – people who come to us for our low prices but stay for the award-winning quality of our exclusive brands.
“Shoppers know they’ll always get more for their money at Aldi. That’s a promise we’ve kept for more than 30 years.”
He added: “There are still communities across the UK that don’t have easy access to quality, low price groceries and that’s something we want to address through our expansion, with plans to increase our investment even further over the next two years to £1.4bn in new and improved stores and distribution centres, creating thousands of jobs for our colleagues and more opportunities for our 5,000 British suppliers.”
*Kantar Worldpanel data, 12 weeks or 52 weeks to 3rd September 2023
**Group figures to YE 31 December 2022 for UK & Ireland
***IGD ShopperVista for period January to May 2023
****Which? Supermarket price comparison for August, published 6th September 2023
Aldi is spreading the festive cheer and bringing together local communities by donating Christmas lunches to those in low-income areas across the UK.
Britain’s fourth-largest supermarket is working in partnership with Company Shop Group to provide free Christmas dinners at Community Shops in the run-up to Christmas.
Aldi has announced when its stores will be open over Christmas and New Year.
From Monday 18th December to Saturday 23rd December, shoppers can visit Aldi stores between 7am and 10pm to pick up everything they need to celebrate Christmas, at the lowest possible prices.