Aldi profits jump as it wins one million new customers

The discounter’s UK and Ireland business registered a 26% spike in operating profit to £265.9m in the year to December 31, 2017, driven by a 16.4% uplift in sales to £10.18bn.

It marked the retaler’s first rise in profits for four years.

Aldi said it won 1.1 million new customers during the year, as it wooed 15.8 million shoppers through its doors.

It plans to attract even more shoppers by building 130 new shops by 2020 and investing in new and existing distribution centres.

The grocer is also ploughing £300m into its Project Fresh initiative, to create more store space for its fresh produce, chilled and food-to-go proposition.

More than 200 existing stores will have been converted to the new format by the end of this year and a further 380 stores will get a facelift by the end of 2021.

Aldi is currently the UK’s fifth-largest supermarket, according to Kantar data, with almost 800 stores and a 7.6% market share.

It said investments in its range and quality helped attract new shoppers from its big four rivals, with its Specially Selected premium lines generating more than £1bn of sales across the 12-month period.

Aldi introduced more than 200 new products in 2017 and reformulated 30% of its products to drive product quality.

The grocer said more customers were shopping more of Aldi’s ranges as a result, with the average number of items per basket rising to more than 19.

Aldi’s UK and Ireland boss Giles Hurley said: “The revolution in British grocery shows no sign of slowing. Savvy customers know they can swap and save with Aldi, thanks to great quality products at lower prices. This is happening on a massive scale, with more than 1.1 million new customers shopping with us throughout 2017.”

Hurley also appeared to take a swipe at big four rival Tesco, which last month launched its Jack’s discount chain in a bid to hit back at Aldi and Lidl.

He said: “While other grocers introduced more complexity into their businesses in their struggle to win back customers, we stuck to our guns and focused on doing what Aldi does best – buying smart, staying lean, improving quality and keeping prices low.”

British focus

Tesco emphasised its focus on British produce when it launched the new format. Eight out of 10 products stocked in Jack’s stores are sourced in the UK.

Aldi said it had switched to 100% British on “dozens” of grocery lines including meat, eggs, butter, cream, mushrooms, potatoes and spinach.

The discounter said it was “actively looking to source even more products from Britain” by expanding its UK supply base.

It already spends more than £100m a week with its 1,000 British-based suppliers.

Hurley added: “Our future investment plans underline our continued commitment to growing responsibly in the UK. That means having a positive and lasting impact on the economies where we operate and improving the lives of British people.

“Our fundamental purpose remains – to bring outstanding quality groceries at the lowest prices for our customers, creating jobs and supporting British farming and manufacturing.

“In 2020, Aldi will have been serving British shoppers for 30 years. In that time, we’ve become part of the fabric of British life. We’re proud to be reaffirming our commitment today.”