Discount grocer Aldi reported a 76 percent gain in annual profit in the U.K. and pledged to invest 600 million pounds ($975 million) over two years to further expand its market share at the expense of traditional supermarkets such as Tesco Plc (TSCO) and J Sainsbury Plc.
Net income rose to 198.1 million pounds in 2013 as sales increased 36 percent to 5.3 billion pounds, the retailer said today in a statement. Aldi said it’s on course to open 54 U.K. stores this year, with as many as 65 more planned for 2015, taking the total to more than 600.
The growth of Aldi and fellow German-owned discounter Lidl has changed the British grocery landscape over the last five years. The two companies together command an 8.3 percent share of the market, researcher Kantar Worldpanel said last week, up from 6.7 percent a year ago. Market leader Tesco is among those that have lost customers to the budget chains.
“People can get what they want and need in our stores, and they are delighted by our overall offer,” Roman Heini, Aldi U.K. group managing director, said in the statement. “It is this level of satisfaction that is both changing how people are grocery shopping in the U.K. and propelling our growth.”
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Aldi said it has taught British customers that they don’t have to pay more for better products. Half of the grocer’s products are British-made, including all fresh meats in the “core range,” while fresh bakery goods are delivered to stores daily, it said.
An average basket at Aldi now contains 17 items, about the same as Tesco and slightly trailing Wal-Mart Stores Inc.’s Asda, the company said, citing the latest four-week data from researcher Nielsen Homescan. The study also showed that Aldi attracted 1 million more shoppers than in the same period last year, the grocer said.
Aldi said it’s on course to have 1,000 stores in the U.K. by 2022.
Date: September 29, 2014