Aldi has said the price of a basket of its goods is lower than a year ago despite ongoing grocery inflation, as the discount chain tries to fight back against increasing pressure from rivals’ price-matching schemes.
The German-owned budget retailer said a slowdown in growth this year – sales are rising by just 0.5% compared with 16% last year – was partly caused by a decision to cut prices as big chains including Tesco and Sainsbury’s have won back customers by promising to match Aldi on key items.
Giles Hurley, the chief executive of Aldi’s UK and Ireland business, said grocery industry data from Kantar indicated Aldi was the only UK supermarket not increasing prices on an overall basket as inflation continued to dog the market.
The retailer, which aims to be the cheapest in the UK, said it had invested almost £100m in more than 300 price cuts in the past three months on items including fish goujons, chicken breasts, potatoes and basmati rice.
He said despite the slowdown in growth this year “low prices don’t go out of fashion and never will”, claiming Aldi had the third largest number of shoppers in the UK and the third largest sales of fresh fruit and vegetables. The chain is edging closer to overtaking struggling Asda to become the UK’s third largest grocer by sales.
“Full-price, more expensive supermarkets recognise us as the benchmark,” he said. “Price is of prominent importance to customers and these schemes are a game of chance for customers. They aren’t consistent and do change. Our customers say they want certainty.”
He added that sales growth this year was looking less impressive after “an extraordinary year” in 2023 when sales rose 16% to £17.9bn in 2023, its highest-ever period of sales growth. Profits more than doubled last year to almost £537m as the retailer bounced back from the Covid-19 pandemic.
Hurley said inflation was easing on most commodities and more generally for households, enabling some to trade up to higher-priced food.
Aldi is catering to that trend, and its premium Specially Selected range made up about half its Christmas range this year.
“For millions of families across the UK, times still are tough and we still offer unrivalled value for them. Some customers are seeing inflation easing and choosing to trade up or treat themselves at home instead of heading to restaurants,” Hurley said.
The supermarket said it would invest £800m in the UK market through the rest of this year including opening 23 more stores, and had signed a £750m deal with the Kent-based grower AC Goatham & Son including establishing the first “Aldi orchard” on a 81-hectare (200-acre plot) on New Green Farm in Gravesend dedicated to growing fruit for the chain.
Aldi, which opened about 30 stores last year, said sales increased 16% to £17.9bn in 2023, its highest ever period of sales growth. The group will open about 30 stores again this year in total, down from about 50 a year prior to 2023.
The retailer, which has more than 1,000 UK stores, has previously announced plans to scale to 1,500.
