Undeterred by pandemic, Aldi keeps UK store expansion plan

© Reuters. Signage is seen at a branch of Aldi Local, London

By James Davey

LONDON (Reuters) – The British arm of German discount supermarket group Aldi said on Monday it would invest 1.3 billion pounds ($1.7 billion) over the next two years, sticking with its store opening plan despite the pandemic’s impact on shoppers’ behaviour.

Britain’s fifth-biggest supermarket, which is privately owned by Germany’s Aldi Sud [ALDIEI.UL], said it would open around 100 new stores across the UK over 2020 and 2021, in line with its long-term target of 1,200 stores by 2025. It currently trades from about 900 in the UK.

Aldi also plans over 100 store upgrades, along with investment in distribution centres and in recent innovations such as a click and collect service.

The group said it expected to create 4,000 jobs next year, adding to 3,000 new roles already created in 2020.

Aldi reported a 49% increase in operating profit to 291.2 million pounds for 2019, on total sales up 8% to 12.3 billion pounds, but that was before the pandemic. It said margins improved, with efficiencies of scale offsetting price cuts.

The group has grown its market share in the UK to 8% over the last decade thanks to its aggressive store opening programme. However, industry data has shown its share edge lower during the pandemic, hindered in particular by a lack of online capability.

That has prompted Aldi to accelerate its push into home delivery so it can benefit from a jump in demand that is expected to endure beyond the crisis.

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In April it started selling online food parcels to help self-isolating and vulnerable customers. It is also ramping up a rapid delivery service in partnership with Deliveroo and is trialing click and collect.

Chief Executive Giles Hurley said Aldi was committed to remaining “Britain’s lowest-priced supermarket” – a claim Aldi says is backed by industry data.

“With the UK’s economic outlook increasingly uncertain, families are more concerned about their grocery bills than ever,” he said.

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