Aldi posts surging sales and profits for 2013

Discount supermarket Aldi has reported booming profits and sales, despite the price war launched by the biggest retailers.

In the UK, the chain’s pre-tax profit surged 65.2% to hit £260.9m in 2013, while turnover rose 35.7% to £5.272bn.

Struggling sales at the big four supermarkets have been partly blamed on the rise of low-cost rivals Aldi and Lidl, leading the major players to cut hundreds of prices to draw in shoppers.

Matthew Barnes, Aldi group managing director, said his business had also enjoyed even stronger growth in the first six months of 2014 than a year earlier.

See also: Tesco profits ‘black hole’ linked to supplier payment practices

“The price cuts [from other retailers] have encouraged customers to think more about what supermarkets charge and have really shown that our every-day, low prices can’t be beaten,” he said.

“We are confident that our prices are 30-50% lower than at the [bigger] supermarkets, and this adds up to big savings for our customers on their weekly shop.”

Aldi has grown its grocery market share from 3.1% at the start of the 2013 to 4.8% by mid-September this year.

In 2013, it opened 42 stores, will launch 54 by the end of this year and another 60-65 in 2015, taking the total to more than 600.

Last year it recruited 9,000 new staff and is expected to take on another 7,000 throughout 2014.

Roman Heini, Aldi UK group managing director, said Aldi’s model was to keep running costs low and use those savings to lower on-shelf prices.

Ways to cut costs include packaging that takes less time to put products on the shelves and a bag-packing area that needs fewer staff on the tills.

“We keep prices constantly low while keeping product quality consistently high, which is exactly what shoppers want,” Mr Heini said.

“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.”

See more