Aldi boosted by inflation and store openings

Discount supermarket chain Aldi said sales during December were 26 per cent higher than 2021 as people returned to in-store shopping, prices rose and the group opened more stores.

In the UK, sales exceeded £1.4bn for the first time. The company did not provide same-store sales figures but a lot of the growth is likely to have come from new stores: Aldi finished the year with more than 990 stores in the UK, compared with 953 in 2021.

Fresh meat sales were strong and Aldi said turkey was still the most popular Christmas roast option despite the devastating avian flu outbreak. The football World Cup also boosted sales of snacks such as crisps and nuts.

The comparable figures for 2021 were affected by the Omicron variant of Covid-19, which hit footfall. Aldi’s relatively limited online shopping service — it offers click-and-collect from about a quarter of its UK stores — meant it lost out on some sales to rivals with full home delivery. Sales growth in December 2021 was just 0.4 per cent as a result.

The return to relative normality during 2022 has helped both Aldi and rival discounter Lidl, both of which have increased their market shares. Aldi overtook Wm Morrison to become the UK’s fourth-largest supermarket by market share during the year.

Rapidly rising prices also helped; annualised food price inflation exceeded 12 per cent in November, according to the shop price index compiled by the British Retail Consortium and NielsenIQ.

Giles Hurley, chief executive of Aldi UK & Ireland, said that in 2023 customers “will always get the UK’s lowest prices at Aldi”. However, faced with rampant cost inflation, particularly in dairy and fresh meat, the group has had to pass on price rises on many products, just as rivals have.

Discounters usually win market share during economic downturns as people look to save money. In the aftermath of the financial crisis, Aldi and Lidl opened hundreds of new stores and tripled their market share at the expense of other supermarket chains.

But rivals are determined not to cede ground this time. Both Tesco and J Sainsbury, the two biggest UK supermarket chains by market share, have pegged their prices for hundreds of staple food products to Aldi’s. They are also using loyalty schemes — which Aldi does not have — to try to keep customers from defecting to other supermarkets.

Asda, the third-largest UK group, has relaunched its loyalty scheme and its cheapest ranges, halting the decline in its market share.

This article has been updated to state that sales exceeded £1.4bn in the UK for the first time, rather than the UK and Ireland as originally stated, and to update the end of 2021 store number from 950 to 953