Aldi’s pre-tax profits in the UK jumped by half last year despite heavy investment and competitive market conditions.
The privately owned company released selected financial information for the year to December 2019 on Monday. It showed sales rising 8 per cent to £12.3bn and pre-tax profit increasing 49 per cent to £271m.
The group said it “saw margins improve last year, with efficiencies of scale offsetting continued investment in prices”.
It is a reversal of the previous year’s numbers; in 2018 profit fell because of heavy investment in new stores.
The latest figures predate the coronavirus pandemic, which caused sales to spike at all supermarkets but necessitated heavy investment in additional staffing and social distancing measures.
Aldi missed out on the online sales boom as it only sells through stores.
Aldi said it would invest £1.3bn over the coming two years on new and upgraded stores, distribution centres and “further innovations across its business”. The company has already pledged to open 1,200 stores in the UK by 2025, up from about 900 at present.
More recently, it has begun to experiment with ecommerce, forming a venture with Deliveroo and starting a trial click-and-collect service.
It reiterated that the deep economic contraction likely to endure after Covid-19 would sharpen its focus on value.
“With the UK’s economic outlook increasingly uncertain, families are more concerned about their grocery bills than ever,” said Giles Hurley, chief executive of Aldi UK. “We’ve seen before that our customers need us most in times of financial hardship, which is why our commitment to remain Britain’s lowest priced supermarket is more important than ever.”
The company launched in the UK with a single store in Birmingham in 1990. The latest data from Kantar estimates it has 18m UK customers and an 8 per cent share of the UK grocery market.
The rapid expansion of Aldi and rival discounter Lidl since the global financial crisis brought widespread change to a sector that had been dominated for decades by a “Big Four” of Tesco, Sainsbury, Asda and Wm Morrison.