The head of UK Aldi has pledged to do “whatever it takes” to maintain the discounter’s price advantage despite a sharp drop in the group’s profits last year.
UK and Ireland chief executive Giles Hurley said mounting pressure on consumer incomes means that “unprecedented changes in shopping behavior” are now taking place.
“People are being forced to change the way they live and shop. rice field. “Value has supplanted convenience as the number one consideration for where to shop.”
Aldi’s market share growth will pick up again in 2022, with the company recently overtaking Wm Morrison to take fourth place. supermarketaccording to data from both Kantar and NielsenIQ.
Harley said it was “honored” to be trusted by the company and promised to do “whatever it takes” to maintain its price advantage.
But Tesco and Sainsbury Aldi price matched Hundreds of frequently-buyed product lines showed some forgoing profits this year to minimize price increases. Morrisons said on Monday it will spend another £100m to keep prices down on its 150 main lines.
The Covid pandemic, the end of the Brexit transition period, rising wages, supply chain issues and the need for customers to keep prices down all weighed on profits in the year to December 2021.
Harley admits that this year has been “a difficult year for us and the industry as a whole.” Aldi’s UK and Ireland revenues increased by 0.9% to £13.6bn, while operating profit fell by nearly 80% to £60.2m.
It achieved an operating margin of 0.4% compared to market leader Tesco’s operating margin of almost 5% and J Sainsbury’s 3.4% in its most recent fiscal year.
Harley downplayed profit erosion in recent years from Covid, price cuts and the cost of the company’s store expansion program, saying “not a private-equity-owned or publicly traded supermarket” means it can focus for the long term. .
“We are a UK-based company, with UK management making decisions for UK customers,” said the company’s German parent company, which has limited revenues in such a large market. When asked how accepting of sex he is, he said.
Aldi in the UK is owned by Aldi Sued, which also oversees operations in the United States, China, Southern Germany, Switzerland and Italy.
Hurley said it was “too early to tell” how the U.S. dollar’s rise against the pound, which has picked up pace since last week’s mini-budget, will affect prices and over what timeframe. rice field.
“About three-quarters of what we sell comes from UK-based suppliers and producers, so as a result we have better insulation than many others.”
As for the company’s non-food products, many of which are from Asia, orders were placed months in advance, making it “too early to speculate on what the future holds.”
Aldi recently abandoned a grocery-picking arrangement with Deliveroo put in place during the pandemic, but continues to run a click-and-collect service from about 200 larger stores.
“We have learned a lot from that and it is worth noting that online is still higher than it was pre-pandemic . Come on,” Harley said.
However, store expansion remains a focus, with the goal of 1,200 stores Still valid until 2025.
https://www.ft.com/content/ae04e816-917a-4723-8fee-6f70ebfaefc3 Aldi vows to do ‘whatever it takes’ to maintain UK price advantage