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Aldi doubles down on price promise despite profit fall

Aldi has doubled down on its price promise to customers as it announced that its pre-tax profit declined by 86.5% to £35.7 million in 2021. The… View Article

FOOD & DRINK

Aldi doubles down on price promise despite profit fall

Aldi has doubled down on its price promise to customers as it announced that its pre-tax profit declined by 86.5% to £35.7 million in 2021.

The supermarket attributed the fall to investment in prices, people and pandemic-related expenses.

It also revealed that it spent an extra £2 billion with UK suppliers last year to take the total to £11 billion.

In its annual trading update, Aldi said sales growth in the UK and Ireland slowed in 2021 with an uplift of just 0.9% to £13.6 billion. However, trading has accelerated in the last six months due to the lifting of pandemic restrictions and the impact of the cost-of-living crisis.

Giles Hurley, Aldi chief executive, said: “Preserving our price discount and rewarding our people will always be more important to us than short-term profit. Being privately owned means we can keep our promises even when times are tough.

“It also means we can continue to invest in the UK, with 16 new stores planned over the next 12 weeks alone, including Broadstairs, Luton, Lincoln and New Southgate in London. As well as bringing our award-winning quality and low prices to even more households, this will also help to create thousands of much-needed jobs whilst boosting British farming and manufacturing.”

The supermarket said it has attracted 1.5 million extra customers to its stores over the past 12 weeks as it overtook Morrisons to become the UK’s fourth largest supermarket. It also revealed that sales of its premium Specially Selected range increased by 29% in the period.

Hurley said: “The cost-of-living crisis is worsening, and it’s being felt by millions of households across the UK. It’s in times like these when our customers rely on us the most, which is why we’re focusing on continuing to deliver our longstanding price promise by offering the lowest possible prices in Britain, every single day.

“Independent research shows our discount is as compelling as ever and that’s why more and more people are switching to Aldi. We will do whatever it takes to maintain our discount to the traditional full price supermarkets and keep grocery prices as low as possible for the millions of customers that shop with us.”

In addition to opening new shops to add to its 970-strong network, Aldi is planning to expand or relocate dozens of existing stores and develop its network of distribution centres and technology infrastructure as part of a two-year £1.3 billion investment.

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