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Aldi to expand in UK despite profit loss

  • September 16, 2019

German discounter Aldi announced on Monday that it aimed to pump 1 billion pounds (€1.14 billion, $1.25 billion) into the British market over the next two years as it and rival Lidl continue their drive to win customers from Britain’s traditional supermarket giants.

Aldi said it planned to open more than 100 UK stores by 2021, creating some 5,000 jobs, and have 1,200 sites by the end of 2025, up from its current 840.

It said it also wanted to increase its store presence in London from 45 to 100, mirroring an announcement by Lidl three months ago that it planned to place 40 new stores in the British capital over five years.

Read more: Supermarket price wars leave UK food suppliers close to bankruptcy

 Aldi brochure in Great Britain (picture-alliance/ dpa/dpaweb)

The UK division of Aldi is privately owned by Germany’s Aldi Sud

Fighting the big four

Both German-owned discounters have been seizing market share from the four big chains currently dominating the British supermarket landscape: Tesco, Sainsbury’s, Asda and Morrisons.

Aldi’s announcement comes despite a low-price pledge and higher infrastructure costs having cut its 2018 profit by almost one-fifth to 182.2 million pounds.

“We’re not and never have been focused on short-term profits. Our focus is on growth; it’s on sales, stores and customer numbers,” Aldi UK and Ireland CEO Giles Hurley told reporters.

Hurley also downplayed Brexit fears, which are haunting the British market at present. He said the company was well-placed to cope with a possible exit of Britain from the EU without a deal because it had a smaller range of products than its rivals and because 75% of what it sold was from British-based suppliers and manufacturers.

Aldi UK currently has a grocery market share of 8.1%. It said sales increased by 11% in 2018 and it gained 800,000 new customers.

Read more: Survival guide to German supermarkets 

tj/rt (Reuters, AFP)

Each evening at 1830 UTC, DW’s editors send out a selection of the day’s hard news and quality feature journalism. You can sign up to receive it directly here.

 

Article source: https://www.dw.com/en/aldi-to-expand-in-uk-despite-profit-loss/a-50451418?maca=en-rss-en-all-1573-rdf

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