Aldi has revealed that it will open 23 new stores across the UK this year as part of an £800million expansion plan after last year saw sales surge by 15 per cent to a record high £19.9billion.
It has not yet announced all of the 23 new locations but has announced nine of the new locations set to open, including Muswell Hill in north London and Leytonstone in east London, in an battle against Asda for supermarket domination.
Aldi UK chief executive, Giles Hurley said: ‘British shoppers are voting with their feet and choosing Aldi as their first-choice supermarket. We’re responding with our biggest ever annual investment in Britain.
‘For every £1 of profit generated last year, we’re investing £2 this year – opening more stores and building the supply infrastructure to bring high-quality, affordable groceries to millions more families the length and breadth of Britain.’
Aldi managed to overtake Morrisons in market share terms in 2022 and now they are getting closer to overtaking Asda, the UK’s third largest supermarket.
Asda’s market share of UK grocery sales has fallen from 13.7 per cent to 12.6 per cent since the beginning of the year while Aldi’s market share of UK grocery sales has risen from 9.3 per cent to 10 per cent.
Aldi said it has invested nearly £100million in over 300 price cuts in the past three months.
Mr Hurley said: ‘Market share is interesting, and of course, we look at it as a business, and there are various milestones in our journey of growth, but it’s not a target. It’s not an aim. Our focus is on growing our business, and the outputs will be what they will be.’
Meanwhile, Asda’s chairman, Lord Rose, last month admitted that he was ’embarrassed’ by the companies performance.
The Leeds-based chain has been hit with falling sales, tech issues causing major disruptions, staff revolts and concerns over billions of pounds in debts left behind from its highly leveraged takeover by the brothers Mohsin and Zuber Issa and private equity firm TDR Capital in 2021.
Other supermarkets have put out strong price-matching campaigns in an effort to compete with discount supermarkets but Mr Hurley says they are ‘a game of chance for customers’.
He said that whilst he is ‘delighted’ that more expensive supermarkets have recognised Aldi as the ‘benchmark’, their price-matching schemes ‘aren’t consistent’ and he recognised that Aldi’s customers ‘want certainty’.
Leytonstone, east London
Gosforth, Northumberland
Pwllheli, Gwynedd
Castle Douglas, Dumfries and Galloway
Horsham, West Sussex
Mere Green, Birmingham
Muswell Hill, London
Gosforth, Newcastle upon Tyne
Plymouth, Devon
Mr Hurely also noted that shoppers have been ‘trading up’ in recent months, buying more premium own-label products, such as Wagyu steak, premium cheeses, and ready meals, which could indicate that the cost of living crisis is easing up for some people.
Although, he added that he is ‘careful about a longer-term outlook on inflation’ because things can ‘change and move dramatically’.
Whilst Aldi’s rise has threatened the big industry players, like Asda and Morrisons, it still faces challenges from its rival Lidl, which was revealed to be the fastest growing supermarket for 12 months in a row, according to research by Kantar.
Aldi’s recent expansion is part of a bigger plan to increase its store estate from over 1,000 stores to 1,500 across the UK.
It will also refurbish 100 of its existing stores, expand distribution centres and update its technology infrastructure to support growth under a two-year £1.4billion investment plan.
The company reported a 16% increase in sales and a significant rise in pre-tax profits to £536.7 million in 2023, up from £152.6 million the year before.
Bosses has been lobbying Prime Minister Keir Starmer in an effort to fast track planning permission for new branches as it struggles to get local councils to approve plans.
Aldi’s national real estate director, George Brown, said he had met with Sir Keir’s senior special adviser last week.
The supermarket has previously warned that bureaucracy and planning objections from rivals were slowing down the speed at which it could expand across the country.
Mr Hurley said: ‘The competitor objections do slow the planning process down.
‘What’s important to stress, though, is that it doesn’t in any way change our appetite or will to grow the business.
‘From our side, if planning is dragged out over a long period, there’s an expense to that and also a lost opportunity.
‘So of course, we would welcome investments which can drive decisions more quickly.’