Everyday Low Prices drive record results for Aldi

Aldi has today announced operating profits of over £271 million for 2013 as it continues to win customers with its everyday low prices.

Group operating profits for the year ending 31st December 2013 rose by 57.7% against 2012, while the discounter’s UK turnover reached a record high of £5.272 billion.

Aldi pinpoints its unique ability to offer the lowest prices, highest quality and best value in UK grocery retail as the driving force behind its growth. The discounter’s average basket size of 17 items has grown to the second largest in the UK, behind only Asda (18.8 items) (according to Nielsen Homescan Data for 4 w/e 16/08/2014).

Group Managing Director of Aldi UK, Roman Heini, commented, “We keep prices constantly low while keeping product quality consistently high, which is exactly what shoppers want. They had become used to thinking you have to pay more for better products. We’ve shown them this doesn’t have to be the case.

“We work efficiently and responsibly to reduce operational costs. Rather than use these savings to boost margins, we lower prices at the checkout. Shoppers appreciate this and know that, while they’re paying less at Aldi, they’re getting much more for their money.”

Examples of Aldi efficiencies include; shelf-ready packaging, which allows products to be displayed in-store in the packaging used during delivery; a packing area that reduces queuing at checkouts for shoppers and means fewer staff are required to work tills; and the most cost effective logistics operation.

Matthew Barnes, Group Managing Director of Aldi, added, “Through these efficiencies, we can effectively focus on what truly matters to our shoppers; fresh, local, quality products. Over half of our range is made in Britain, 100% of our core range of fresh meats is British and fresh bakery goods are delivered to store daily.

“We offer this to shoppers at affordable prices while working closely with suppliers to ensure everyone gets a fair deal. Aldi efficiencies are subtle, but the difference they make is massive.”

Increasing shopper satisfaction is supporting Aldi’s growth, which has been driven by a customer-focussed approach to market. This year, Aldi achieved first place in Which? Magazine’s Customer Satisfaction Survey, nudging Waitrose from the top spot. Aldi was the only supermarket to score 5 out of 5 stars for pricing in the survey and also scored positively for fresh produce quality, customer service, store environment and filling your trolley.

Roman Heini said, “Aldi is not no-frills shopping. No-frills suggests that shoppers have to make a compromise and that they are less satisfied with their shopping. As the Which? survey shows, this is not the case at Aldi. People can get what they want and need in our stores, and they are delighted by our overall offer.

“It is this level of satisfaction that is both changing how people are grocery shopping in the UK and propelling our growth. We’ve achieved this by thinking, acting and shopping like our customers. They are at the heart of everything we do.”

Nielsen data shows that, in August this year, Aldi attracted 1,000,000 more shoppers than the same period in 2013 (4 w/e 16/08/2014 vs. 4 w/e 17/08/2013).

Similarly, despite a round of aggressive supermarket price cuts and the large supermarkets actively targeting Aldi, the discounter has continued to grow its market share. During 2013, Aldi grew its market share from 3.1% to 4.0% and currently has a record market share of 4.8% (Kantar Worldpanel, 12 weeks ending 20/01/2013, 05/01/2014 and 14/09/2014).

According to Nielsen data, Aldi’s spend on offer for 2013 was just 6% (52 w/e 04/01/2014), compared to the industry average of 35%.

Matthew Barnes added, “We have actually seen stronger growth in the first half of 2014 than in the first six months of last year. The price cuts have encouraged consumers to think more about what supermarkets charge and have really shown that our everyday low prices can’t be beaten.

“Data shows that, while our average basket size is only one or two items smaller than Asda and similar to that of Tesco’s, our average basket is about £6 to £7 cheaper. We are confident that our prices are 30% to 50% lower than at the supermarkets, and this adds up to big savings for our customers on their weekly shop.”

Aldi is planning a nationwide expansion programme to support its growing popularity. During 2013, it opened 42 new stores and is on course to open 54 new stores in 2014, with another 60-65 new stores planned to open next year. This will take total UK store numbers to over 600, putting Aldi on course to have 1,000 stores by 2022.

At the same time, Aldi is creating new jobs in the UK. Aldi recruited 9,000 new members of staff in the UK in 2013, including more than 291 apprenticeships and 165 graduate positions. The company expects to recruit more than 7,000 new members of staff in 2014, including 500 apprenticeships and 160 graduate positions.

Matthew Barnes concluded, “In addition to new store openings, we’ll be upgrading existing stores to meet customer demand. We’re investing over £600 million in our operations over the next two years to support this growth. This means we can grow while always giving customers the service, value and award-winning quality they expect at Aldi.”

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