Aldi has reported record sales in the UK last year, which the chain attributed to shoppers hunting for discounted groceries as food costs soared during the cost of living crisis.
The retailer said it had attracted an extra 1 million customers to its 1,000 UK stores over the past year, in what it said was a sign that shoppers were turning their back on established supermarkets.
It came as the UK arm of the company recorded annual sales of £15.5bn during 2022, an increase of almost £2bn on a year earlier, and a new record during the 33 years it has been trading in Britain.
Profits tripled to nearly £179m from £60m a year earlier, when its margin and profits were hit by investment in measures related to trading during Covid.
Giles Hurley, the chief executive of Aldi UK and Ireland, said consumers had changed their behaviour because of the increased cost of living.
“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,” he said.
Aldi has been trying to shake its image as a “top up” destination, where shoppers would go to buy extra items, because its stores tend to sell a fraction of the range of products or big brands found at its mainstream rivals including Tesco or Sainsbury’s.
An Aldi store sells about 2,000 products, compared with the 40,000 typically found in a large supermarket, where shoppers have traditionally bought the bulk of their groceries.
Aldi and its fellow German discount chain Lidl appear to have been the main beneficiaries of changing consumer behaviour during the recent period of food price inflation.
Market share data from July showed that Aldi was the UK’s fastest-growing grocer, according to analysts at Kantar, having grown to hold 10.1% share of the market, up from 9% a year earlier. The chain overtook Morrisons last year to become the UK’s fourth-largest grocer.
The company said it would invest more than £1.4bn in the UK in the next two years, as it plans to open new stores and distribution centres, while also improving existing branches.
It said it planned to open a further 18 stores across the country this year, and has recently committed to opening a further 500 stores. It said its expansion plans would create 6,000 new jobs this year, on top of the 6,000 permanent roles it added last year.
Aldi said it had invested more than £350m so far this year to bring down the prices of 650 products and said it had more price cuts planned before Christmas as food price inflation continues to fall.