Aldi plans massive London expansion as sales soar

A woman pushes a shoping trolley past an Aldi logo as she leaves one of the company's supermarket stores in London on September 26, 2016. Aldi UK announced on Monday that it will invest £300 million ($389 million, 346 million euros) to revamp its stores over the next three years. Aldi and its German rival Lidl have boomed in Britain, grabbing market share from traditional supermarkets Asda, Morrison, Sainsbury's and Tesco, as customers tightened their belts to save cash. / AFP / Daniel Leal-Olivas        (Photo credit should read DANIEL LEAL-OLIVAS/AFP/Getty Images)
An Aldi supermarket store in London, where the chain announced it will expand. Photo: Daniel Leal-Olivas/AFP/Getty Images

Discount German supermarket Aldi said on Monday that it plans to double its London store count to more than 100.

The chain will focus on opening Aldi Local stores, which are around half the size of its traditional stores and stock around 1,500 products, chief executive Giles Hurley said.

“London shoppers regularly tell us they would switch to Aldi if there was one nearby, so there is clearly a significant growth opportunity for us in the capital,” he said.

Overall, Aldi said it planned to add 100 more stores across the UK within the next two years, in a move that could add up to 5,000 jobs.

The announcement comes as the supermarket announced that sales surged by 11% to £11.3bn in the year to December 2018.

But operating profits, which fell 26% to £198m, were dented by the costs of the chain’s aggressive expansion.

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The group, which has 840 stores across the UK and Ireland, says it wants to have 1,200 stores by 2025. Just 45 of its stores are currently in London.

It is currently the UK’s fifth-largest supermarket chain, behind Tesco, Asda, Sainsbury’s and Morrisons, and attracted 800,000 new customers in 2018.

“For almost three decades we've proven that investment equals growth — investment in our infrastructure, our people and our prices,” said Hurley.

Hurley said that Aldi would add around 50 new stores each year, but he emphasised that the dent to profits was not just as a result of infrastructure spending, which amounted to £531m.

It also was due to promotional price cuts for consumers, he said, noting that the chain would invest £1bn in the UK over the next two years.

Trials of the Local format stores due to be opened in London have gone better than expected, Hurley said.

“Whilst our expansion will continue to reach every part of the UK, we're increasing our focus on London, where our market share is just 3.4%, compared to 8.1% nationally,” he noted.

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