The cost-of-living crisis has “changed the way Britain shops for groceries”, Aldi declared today, after posting record annual sales.
The discount supermarket chain, 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 in the UK & Ireland increased by almost £2bn to £15.5bn, group figures for the year ending 31 December 2022 revealed, this compares to £13.6bn in 2021.
Aldi said the figures represent a “new record in its 33-year history – as inflation-hit consumers prioritised value like never before.”
Latest data from insights firm Kantar reveals sales are 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, according to Kantar.
Aldi is also the second most popular UK supermarket among households for doing a full weekly shop, according to data from IGD ShopperVista for the period January to May 2023, 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.
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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.
Aldi 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.
The expansion will create 6,000 new jobs in total this year, adding to the 6,000 permanent roles created last year.
“Although inflation is easing, households are still under real pressure from higher living costs,” Aldi UK and Ireland CEO, Giles Hurley, said. “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.
“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.
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