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Aldi to preserve 'significant price advantage' amid record sales of £7.7bn

Published 26/09/2016

Aldi is to refurbish more than 100 stores in 2017
Aldi is to refurbish more than 100 stores in 2017

The British arm of Aldi has said it will invest £300 million in store revamps after posting another year of record sales, although profits were again hit by the supermarket price war.

The cash will be used to spruce up its fixtures for beers, wines and spirits and fresh produce, as well as a new "food to go" feature, with more than 100 stores to be refurbished in 2017.

Chief executive Matthew Barnes said the move was the result of a "listening exercise" involving more than 50,000 shoppers, adding that the firm's investment plans have been "unaffected" by the UK's decision to quit the European Union.

The German-owned firm added that it will open 70 new stores in the UK next year as part of plans to increase supermarket numbers from 659 to 1,000 by 2022.

Sales grew by 12% to £7.7 billion in 2015, with Aldi doubling its turnover in just three years. The company confirmed like-for-like sales were in positive territory, although Mr Barnes admitted they had slowed.

Operating profits dipped 1.8% to £255.6 million, which the firm put down to its "continued investment in prices".

Mr Barnes said the firm would continue to invest in prices in order to maintain a "significant price advantage" over rivals, flagging that Aldi has cut prices on 30% of its products this year.

"Regardless of what competitors may say or do, our price advantage will be maintained and our customers will always pay the lowest grocery prices in the UK," he said.

He vowed to "ride the storm" created by the supermarket price war, triggered by Aldi and fellow German supermarket Lidl, which has embroiled the sector, hitting margins at all of the so called "Big Four" players - Tesco, Asda, Sainsbury's and Morrisons.

Aldi said 761,000 new customers walked through its doors last year, helping its market share grow to a record high of 6.2%.

Mr Barnes said that Aldi's online operation, which was launched in January, is seeing 11,000 orders per week, ahead of expectations. The chief executive said that online has proved particularly popular in London and the South East, which accounted for a quarter of all orders.

Aldi also pledged to make "substantial investments" in enlarging two existing distribution sites, redeveloping its UK head office in Atherstone, Warwickshire, and opening a new distribution centre in Cardiff next year.

Mr Barnes said: "During the past five years we have invested close to £1.7 billion in the UK by opening more stores than any other supermarket and enhancing our distribution capabilities.

"Our future capital expenditure plans are unchanged - we will continue to make significant investments in our business, paying our employees more than any other supermarket."

Aldi said its strongest-performing categories last year included fresh meat and fish and its Exquisite wine range, while sales of its Mamia nappies grew by 29%, making it the UK's second biggest-selling brand.

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