Aldi announces record sales and reveals plans to launch e-commerce operation next year
Aldi has revealed that its sales jumped 31% in its last financial year and said its plans to launch an online store next year. .
The fast-growing discounter recorded sales of £6.89bn in the 12 month period to 31 December 2014 – equivalent to £31m in extra sales revenue every week during 2014. However, operating profit fell slightly from £271.4m to £260.3m due to increased investment in prices to maintain its competiveness.
The business has now more than doubled its sales in the past three years alone, becoming the UK’s sixth biggest grocer by market share. This has been supported a significant increase in investment in the UK with Aldi spending a total of £878m over the period with record capital expenditure last year of £438m in new stores and regional distribution centres.
Aldi currently operates 598 stores in the UK and the group said it remains on course to achieve its target of 1,000 stores by 2022. It is on track to open 65 stores in 2015, up from 54 in 2014. Aldi, which is privately-owned, said the strength of its balance sheet, which had net assets of almost £2bn at the end of last year, would underpin its continued investment in the UK.
Alongside the record sales, Aldi confirmed plans to launch an e-commerce operation early next year to further expand its reach and compete with the Big 4 multiples in the fast-growing online channel. The grocer said it will begin selling wine by the case online from early next year, followed by non-food ‘Specialbuys’ in the spring, offering customers home delivery and collection from third party locations. It said the move formed part of its long-term growth and investment strategy in the UK.
Meanwhile, the business confirmed it now sources 69% of its products from British suppliers, including 100% of its milk and its entire core range of fresh meat and fresh bakery goods. Aldi also said that it has continued to expand its range in store to drive new customers and frequency of visits, introducing 150 premium and Specially Selected lines such as deli items, fresh produce, meat, herbs and the award-winning Exquisite Collection of Wines. Over 1,000 bottles of wine from the Exquisite Collection are sold per hour, with year-on-year sales up 40%
Matthew Barnes, CEO of Aldi UK & Ireland, said: “Our focus on offering the best-quality products and range at unbeatable, straightforward prices is bringing more and more shoppers through our doors, helping us to achieve consistent market-leading growth in sales.
“We refuse to be beaten on price by anyone. We’re maintaining a significant price gap of at least 15% on an average basket of goods – people are seeing that value at the checkout, tasting the quality at home and coming back to do a full weekly shop, time and time again.
“As the grocery market continues to evolve, our unique model, operational efficiency, private ownership and financial strength mean we’re able to keep investing in our business – from people and presence to products and prices.”
Commenting on the group’s e-commerce plans, he said: “Our launch online is another exciting chapter in our story. This will enable us to introduce the Aldi brand and some of our best-selling, best-quality and best-value products to thousands more customers across the UK.”
Commenting on chain’s future, Barnes added: “The past 25 years has been an incredible journey for Aldi in the UK. During that time, the grocery market has changed beyond recognition – and changed for the better. At present, there are still 47% of households that don’t shop with us. We’re hugely excited about the enormous scope for growth over the next 25 years.”