Retailer Aldi plans to open a new store weekly in the UK

Aldi
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Discount retailer Aldi announced its plans to open a new store every week on average for the next two years in the United Kingdom (UK).

According to Giles Hurley, chief executive officer (CEO) of Aldi UK, the company plans to invest £1 billion to achieve its store expansion plans. Hurley said “The reality is that almost 50% of the population of the UK doesn’t currently shop with us and they tell us the main reason for that is that they don’t have a store near us.”

In 2018, Aldi reported over 800,000 new customers, boosting its sales by 11% or £1.1 billion compared with 2017. However, most of the sales growth was attributed to the opening of new stores and profits during the year declined by 18%, partly due to price cuts aimed at maintaining its competitive advantage.

Currently, the retailer has more than 840 stores and is focusing more on London, aiming to double the number of stores within the M25, from 45 to 100, by the end of 2025. Hurley added “Within Greater London, our market share is around half of what it is in the rest of the country so there’s clearly a big opportunity for us to expand the business. In the long term, we can comfortably see us opening 200-250 stores within London.”

However, there are concerns over Aldi’s ability to find enough locations to suit their low-cost business model. Adam Leyland, editor of the Grocer magazine, argued “It’s not straightforward as you don’t have the parking spaces. It’s also harder to get good sites in London. So you have to have a very flexible model and Aldi is so formulaic as a discounter that this is harder to manage. But they are determined to do it and they are a very capable grocer. We’ve seen over the years how they’ve responded to the dynamics of the UK market.”

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The company is currently experimenting with a new, smaller, convenience store format and already has eight of these stores in Greater London.

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