Aldi is opening four new stores throughout September
Aldi is opening a new shop every week this month as the discount giant steps up its assault on Britain’s supermarkets – with Lidl also embarking on a huge expansion drive. The German grocers are piling the pressure on Tesco, Sainsbury’s, Asda and Morrisons as millions of families look for ways to cut the cost of their weekly food shop.
And the battle is becoming increasingly bitter. Aldi has accused its bigger rivals of using loyalty schemes and price-match promises that can make discounts look better than they really are.
Its chief executive Giles Hurley has repeatedly attacked what he calls supermarket ‘gimmicks’, arguing that shoppers should not need a loyalty card to get a competitive price. Aldi’s message is simple: it wants customers to believe its prices are cheap every day, rather than only when a particular promotion is running.
The row comes as Aldi puts the pedal to the metal on its own expansion. It will open four new stores during September – effectively one every week. The latest branch opened in Balsall Common, near Solihull, on September 3.
A store in Telford will open on September 10, followed by Rayleigh in Essex on September 17 and Hoxton in east London on September 24. Up to 30 jobs are being created at each store.
The openings are part of a £370million investment in new Aldi shops this year as the retailer works towards its long-term ambition of having 1,500 stores across Britain. Aldi currently has around 1,080. It has also identified 160 locations across the country where it would like to open new branches – giving a clear indication of the scale of its ambitions.
Jonathan Neale, Aldi’s managing director of national real estate, said the company knew there were still communities that wanted an Aldi. He added: “Opening a new store every week throughout September demonstrates the pace of our expansion.”
But Aldi is facing an increasingly formidable rival in Lidl. Lidl has already passed the 1,000-store mark in Britain and is now the country’s fifth-largest supermarket, with a market share of 8.6 per cent. Its sales rose 8.8% in the 12 weeks to May 17, according to Worldpanel figures. And it is not slowing down.
Lidl announced earlier this year that it would invest more than £600million in opening more than 50 new stores over the following 12 months. The expansion is expected to create almost 2,000 jobs.
It has already been moving at a remarkable pace. In January, Lidl announced plans to open 19 stores in just eight weeks – the equivalent of more than two new branches every week = creating up to 640 jobs. And in April it published a shopping list of hundreds of potential locations for further stores, ranging from Aberdeen to London and Wales to Berkshire.
It is actively seeking sites in areas with strong footfall and easy access, highlighting just how aggressively it is targeting further growth. The expansion is particularly significant because the discounters are no longer simply niche alternatives for shoppers looking for cheap baked beans and basic groceries.
They are increasingly taking customers – and their weekly shops – from the traditional supermarket giants. Lidl says it has picked up more than £661million in ‘switching gains’ from customers moving from competitors over the past year.
Meanwhile Aldi has been cutting prices aggressively. It announced a further £100million investment in July to reduce the prices of 330 products, taking its total price-cutting investment this year to £300million.
And the discounter has another weapon in its armoury. Consumer champion Which? named Aldi Britain’s cheapest supermarket for August – its tenth consecutive monthly victory.
Even after taking loyalty discounts into account, Which? found a basket of 92 popular groceries was £30.09 more expensive at Tesco and £26.19 more at Sainsbury’s. Waitrose was £64.39 more expensive. The mainstream supermarkets have consistently challenged the Which? findings and questioned whether the comparisons are fair.
The supermarket giants have been piling money into their own price-cutting and loyalty schemes. Tesco has Clubcard Prices. Sainsbury’s has Nectar Prices. Other chains have introduced price-matching initiatives designed to reassure shoppers that they are not paying over the odds.
But Aldi’s argument is that customers should not have to navigate a maze of special offers to know whether they are getting a good deal.
