Aldi announces 70 new stores and £300m investment

Budget supermarket Aldi has announced that it will open 70 new stores in the next year, as it invests £300 million in its property portfolio.

The chain, which operates 785 stores in the UK and Ireland, will open 70 new properties in the UK in 2017, adding to its existing 659-strong portfolio, as part of its plan to reach 1,000 by 2022.

The expansion, which comes after a round of larger supermarket chains having to sell off properties and streamline their costs, arrives as Aldi reports record results for its last financial year. Sales in the UK and Ireland reached £7.705bn in the year to 31st December 2015 (up from £6.893bn in 2014), a year-on-year increase of 12 per cent. During the same period, sales in the UK grocery sector grew by just 0.4 per cent.

The performance, which equates to an extra £68m of sales every month, means Aldi has doubled revenues in just three years.

Aldi will also invest £300 million in its property portfolio, as part of an series of improvements and refreshes to its existing real estate. The new format includes newly-designed fixtures for beers, wines and spirits, fresh produce and baby and toddler, as well as a new food-to-go fixture. Each store will also benefit from a significant increase in chill space, underlining the growth of Aldi’s fresh ranges.

Other improvements include new in-store colours to signpost categories, signage focusing on quality, range and provenance, and product-specific lighting.

It is expected that over 100 stores will be refurbished in 2017 with elements already being introduced into new stores this year.

Matthew Barnes, Chief Executive Officer – Aldi UK and Ireland, says: “Aldi has continued to win the trust of millions of new customers thanks to a single, simple and unbroken promise – to provide the very best quality products at prices that cannot be beaten. This explains our performance and underpins our investment.”

Barnes says the investment in improving its stores has come from the company’s largest-ever “customer listening exercise”, involving over 50,000 shoppers across stores and its Like Aldi Tell Aldi online portal.

“The overwhelming message was clear: our customers love the quality of our products, our commitment to low prices and the efficiency of our stores, but they want to shop our fresh produce, fresh meat and fish, food-to-go and award-winning wines more easily,” he comments. “We’ve listened and we’re evolving our format for new and existing stores to deliver this, while staying true to our core principle of efficiency.”

Last year, the business invested £536.2m of capital expenditure in opening new stores and improving its distribution network in the UK and Ireland, bringing total investment over the past five years to £1.662bn.

“During the past five years we have invested close to £1.7bn in the UK by opening more stores than any other supermarket and enhancing our distribution capabilities,” says Barnes. “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, treating our suppliers fairly and delighting our customers daily with outstanding quality products at unbeatable prices.”

Indeed, Aldi said its future capital expenditure plans are unaffected by the UK’s decision to leave the EU. The group will continue to make “substantial investments” to enhance its operations across the UK. These include enlarging two existing distribution sites, redeveloping its UK head office in Atherstone, Warwickshire, and opening a new distribution centre in Cardiff early next year.