Aldi promises to offer the ‘lowest grocery prices in the UK’

Aldi bosses have vowed to prioritize lower prices over short-term profits as they warned the cost-of-living crisis is “worsening” for millions of households.

The supermarket vowed to have the “lowest grocery prices in the UK” as it pledges to support customers facing rising energy and fuel bills.

The UK arm of German discounter Aldi saw its operating profit fall 79 percent to £60.2 million last year, new figures released today show.

Promise: Aldi bosses have pledged to prioritize lower prices over short-term profits

Pre-tax profit for 2021 fell 86.5 percent year-on-year to £35.7 million.

The fall in profit was attributed to investments to keep prices down, higher staff costs and Covid-19-related expenses. Revenue rose 0.9 percent to £13.66 billion.

Giles Hurley, Managing Director of Aldi UK and Ireland, said: “Maintaining our discounted prices and rewarding our staff will always be more important to us than short-term gains.

“Because we’re privately owned, we can keep our promises even in difficult times.”

He added: “The cost of living crisis is worsening and is being felt by millions of households across the UK.

“It is at times like these that our customers rely on us the most, which is why we are focused on continuing to deliver on our long-standing price promise by offering the lowest possible prices in the UK every day.”

Aldi and rival discounter Lidl have been hurt during the pandemic by a lack of significant online operations, but have drawn customers from traditional supermarkets as the cost of living crisis has forced them to seek savings.

Promise: Aldi has promised to have the ‘lowest grocery prices in the UK’

The retailer reported an 18.7 percent increase in sales in the 12 weeks ended Sept. 4 compared to the same period last year. The Group does not publish like-for-like sales figures.

Aldi overtook Morrisons as the UK’s fourth largest supermarket earlier this month, according to experts from Kantar. The market share is around 9.3 percent and is thus the highest in its 32-year history.

Aldi said it gained 1.5 million additional customers compared to last year as people search for its discount offer.

It also confirmed it will open 16 new stores over the next three months as part of its ongoing £1.3billion expansion plan.

The discounters’ performance has forced the traditional key players – market leaders Tesco, Sainsbury’s, Asda and Morrisons – to compete more aggressively. Tesco and Sainsbury’s both have schemes that match Aldi prices on some products.

Iceland’s boss has also spoken out about the cost of living crisis hitting customers. Richard Walker, Iceland’s chief executive, said shoppers were being forced to leave items at checkout because they realized they couldn’t afford them.

Iceland has teamed up with energy company Utilita for a Shop Smart, Cook Savvy collaboration that will update food packaging to include more economical cooking methods and free bill-saving workshops.

Rising food inflation

Food and non-alcoholic beverage prices rose 13.1 percent in the year to August, up from 12.7 percent in July, according to the latest data from the Bureau of National Statistics.

The biggest upside came from milk, cheese and eggs, where milk and cheese prices rose more between July and August than between the same two months a year ago, the ONS said earlier this month.

Grocery prices rose at their fastest pace since 2008 through August as the war in Ukraine continued to push up prices at supermarket checkouts.

Falling gasoline and diesel prices pushed headline inflation down slightly to 9.9 percent, but it remains near a 40-year high.

Consumers are now paying around £571 more for their groceries on average than they were last year, according to data released by Kantar earlier this month.