Aldi fired another salvo in the UK supermarket price war yesterday as the discount grocer detailed plans to start selling goods online.
The German budget supermarket will start selling wine by the case from early 2016, followed by non-food products later in the year. It unveiled its £35m move into e-tail yesterday while toasting record sales of £6.9bn last year, up from £5.3bn in 2013.
The decision to start with drinks comes as a result of customer demand for its “Exquisite Collection”. It said 1,000 bottles are sold an hour from the range, which includes Clare Valley reisling from Australia and a New Zealand pinot noir.
Goods will be delivered to homes or buyers can collect them from 5,000 pick-up points. Aldi had previously said it would be difficult to maintain low prices, given the cost of delivery.
But Matthew Barnes, the chief executive of Aldi UK & Ireland, yesterday said the online debut “is another exciting chapter in our story” and that it would allow the group’s products to be introduced to thousands more customers.
Plans came as latest grocery share figures from Kantar Worldpanel show that Aldi increased sales by 17.3 per cent over the three months to 13 September – making it the UK’s fastest-growing grocery retailer for the past 50 months.
The company opened its first UK store in 1990 and now has a market share of 5.6 per cent. Despite the turnover jump, Aldi’s operating profit decreased to £260.3m from £271.4m. Pre-tax profit was down to £250.6m, from £260.9m.
The fall was owing to investment, expanding its stores in the UK and the impact of the supermarket price wars.
Mr Barnes said: “We refuse to be beaten on price. We’re maintaining a significant price gap of at least 15 per cent on an average basket of goods.
“People are seeing that value at the checkout, tasting the quality at home and coming back to do a full weekly shop, time and time again.”
Meanwhile Aldi is facing further competition from its budget chain rival Lidl, which is planning a big assault on central London with dozens of new supermarkets in some of the capital’s most desirable neighbourhoods.
But Aldi’s own expansion is in full swing. During 2014 the company created 7,000 new jobs and paid £57.9m in tax. It invested £438m on stores and distribution centres, has 598 shops in the UK and is on track to have 1,000 by 2022. Also over the next seven years it will add 35,000 employees to its current 28,000.
The group’s update was welcomed by Catherine Shuttleworth, the chief executive of shopper marketing agency Savvy. “The retailer’s market share performance has been phenomenal and its store-opening programme has allowed it to reach new shoppers up and down the country,” she said.
Regarding the online debut, Ms Shuttleworth added: “Some might argue that such a venture could be a distraction from an existing business model which is currently firing on all cylinders, but we see this as a shrewd move.”
During 2014, Aldi created 7,000 new jobs and paid £58m in taxReuse content