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Annual profits more than tripled at Aldi in the UK last year despite a fall in grocery market share in recent months.
The chain, which has just over 1,000 shops in the country, said pre-tax profits had increased to £536.7mn for the 12 months to December 2023, from £152.6mn the year before.
The numbers come after Aldi suffered a rare reversal in market share in recent months, losing out to rivals including peer Lidl. Aldi at present accounts for 10 per cent of the UK grocery market.
Nick Bubb, an independent retail analyst, said: “There has been a lot of focus recently on the weak sales figures . . . but it sounds like the business itself has been concentrating on its bottom-line performance.”
Sales in 2023 rose to a record, Aldi said, increasing by almost 16 per cent to £17.9bn, compared with £15.5bn a year earlier as shoppers continued to prioritise value despite falling inflation. Its profit margin increased from 1.2 per cent to 3.1 per cent, while the industry average is about 4 per cent.
UK chief executive Giles Hurley said on Monday that it was not surprising that its sales growth was slower “given that we’re lapping some very high previous year figures”, and he was confident that total sales would increase as it continued to open more stores.
Unlike many of its rivals, “at Aldi, we don’t return our profits to external shareholders and dividends . . . we reinvest in our business”, he said. “Higher sales drive even bigger efficiencies in our stores, which helps lift profits.”
The German group overtook Morrisons in 2022 to become the UK’s fourth-biggest grocer by market share, according to data firm Kantar, as sales boomed during the cost of living squeeze.
Alongside Lidl, Aldi set up shop in the UK in the 1990s and the pair now own 18.1 per cent of the UK market having lured shoppers with lobsters for £5 and eclectic middle aisles of lifestyle, household and DIY bargains.
The chain said it would open 23 new UK sites before the end of this year. It is on track to open 1,500 stores longer term although it ditched a target to have 1,200 sites by 2025.
Clive Black, head of consumer research at Shore Capital, said: “We see Aldi as a very effective supermarket operator, the disrupter of the 2010s in the British grocery scene, which is not going away, clearly, but is maturing and so [is] a more rational player in the big scheme of things.”
