Aldi announced a significant increase in capital spending for its UK and Irish operations, allocating £900m and targeting the opening of more than 40 stores in the coming year. The retailer, which currently operates 1,092 locations across both markets, reported record sales of £19bn last year, though profit margins contracted by £2.6m to £433m as the company reduced prices despite inflationary pressures.
Giles Hurley, chief executive of Aldi’s UK and Irish division, indicated growing confidence in the company’s expansion strategy. He noted that Aldi ranks as the third largest supermarket in the UK by items sold and customer numbers. The company plans to open 42 stores this year, with 30 launching in the next 10 weeks, before moving to a similar pace next year. Long-term objectives include growing to 1,500 outlets across both markets, though Hurley acknowledged that site selection and planning processes can constrain the pace of growth.
Hurley emphasized consumer sensitivity to pricing in an inflationary environment, noting that Aldi attracted 425,300 additional customers through its consistent focus on affordable groceries. He attributed part of this growth to maintaining the lowest prices in the market compared to competitors. The executive also commented on rival strategies, suggesting that loyalty discount schemes offered by chains including Tesco and Sainsbury’s involved an element of uncertainty for shoppers regarding actual value delivery.
On broader food system issues, Hurley raised concerns about climate impacts on UK crop yields and food inflation, which stood at 2.8% in August. He called for the government to prioritize the nation’s food system as a strategic asset and reduce reliance on imports. Aldi said it spent £14bn with British suppliers last year and committed to securing at least half its product range through long-term supplier agreements by next year.
The company has also expanded its digital capabilities through a partnership with Deliveroo for grocery delivery via its app. While Aldi’s growth strategy represents a continued push into the market, competitors such as Lidl have achieved faster expansion, partly through loyalty programs and online shopping options that Aldi is now developing.
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