Aldi to Invest $390 Million in Upmarket and Fresh Growth in the U.K.
UNITED KINGDOM - Aldi is turning up the heat on its move into the U.K. with a focus on more upmarket stores, investing 300 million pounds (about $390 million) into the move.
“The U.K. price war continues to rage on, but we are prepared to ride out the storm,” Matthew Barnes, Chief Executive Officer of Aldi U.K. and Ireland, said on a call with reporters, according to Bloomberg. “We will cut prices further if necessary.”
The retailer’s new store formats will include new fixtures and better signs, with an emphasis on product quality and added refrigeration for fresh produce.
Aldi’s pursuit of increasing favor with upmarket shoppers has seen some return, according to the report, with more favor being shown towards the chain by more affluent Brits despite its cutting prices on 30 percent of its products so far this year.
Currently Aldi plans to open 70 new U.K. locations next year, with a goal of 1,000 U.K. stores by 2022, despite the fact that the chain has disclosed previously that the competitive market has yielded rising sales but lower earnings.
Last year, Aldi saw a 12 percent increase in sales, 7.7 billion pounds (about $10 billion) but a 1.8 percent slip in operating profit to 256 million pounds (upwards of $3.3 million).
Bloomberg noted that, overall, Aldi’s share of the British grocery market is at a record 6.2%, with 13.9 million U.K. households on its customer list.
The U.S. market is another stomping ground in which Aldi has pushed for a broader footprint, having recently announced plans for a new stateside divisional headquarters and a 500,000-square-foot distribution center and hosted hiring events in a number of states.
Will Aldi reach its goal of further instilling itself in the U.K. region, and will that growth flow over into further U.S. growth as well? AndNowUKnow will continue to keep you informed of the latest.