German supermarkets face their British competitors

This article was originally published in English

German retailers aldi and Lidl They are ahead of their British competitors with greater investments and lower prices, altering the established order. Aldi takes on its British rivals with the announcement of a record investment of 1.4 billion pounds (1.6 billion euros) in new stores and lower prices.

The two-year plan aims to accelerate its expansion throughout the United Kingdom and close distances with the three big chains in the country. More than 100 stores will be renovated and opened 23 new before the end of the year. The investment will be added to the 1,020 Aldi storeswhich has more than 45,000 employees.

To help manage supply chain demands To supply more stores more efficiently, Aldi plans to expand its network of 11 regional distribution centers and update the technological infrastructure that supports its operation.

In the last three monthsthe retailer has invested around 100 million pounds (89 million euros) in price cuts for consumers, while store staff have seen increased his salary by 79 million pounds (94 million euros).

Rising profits drive growth

Aldi is now the fourth supermarket of the United Kingdom, according to Retail Economics, and is approaching its rivals Tesco, Sainsbury’s and Asdathe three best performing retailers in the competitive British sector from supermarkets.

The latest results Aldi’s annual reports, corresponding to the 12 months to December 2023, show the greatest period of sales growth in its history: 16% more, up to 17.9 billion pounds (21.4 billion euros), compared to 15.5 billion pounds (18.5 billion euros) in 2022.

Giles Hurley, CEO of Aldi UK and Ireland, says: Its objective is to increase the influx of customers offering value to cash-strapped consumers: “British shoppers they vote with their feet and they choose Aldi as their first choice supermarket. We are responding with our largest annual investment in Britain.

And he continued: “For every pound of profit generated last year, we will invest 2 pounds this year: we will open more stores and build the supply infrastructure to bring affordable, high-quality food to millions of families across Britain.”

The fate of his German compatriotLidl is also on the rise. Lidl, the sixth British supermarket, has 11,000 establishments in 32 countriesover 800 of them in the UK. According to data from the consumer company Kantar, in the 12-week period until May 12, 2024, Lidl sales increased 10.9% year-on-yeardriven by both its in-store bakery offering and its successful loyalty program. The good news for Lidl continued with a cgrowth of its market share up to a record of 8.1%, compared to 7.7% in 2023.

British competitors will not be able to stop Lidl’s rise

Lidl has also reaped praise from the British retail sector. In March she was awarded the Supermarket of the Year award at the UK Retail Week Awards. The judges were impressed by its growth over the last 12 months and its value proposition. It was also praised for involvement with the communitysuch as donating food.

One of the judges summed up Lidl’s impact: “Lidl has a tremendous business in which it has captured a lot of market share. Unless the rest of the supermarkets do something, this will continue“.

Ryan McDonnell, CEO of Lidl GB, was proud of the achievement of the supermarket: “We are delighted to have been named Supermarket of the Year, a particularly moving award, as In 2024 we will celebrate 30 years in Great Britain. When we opened the doors of our first store in 1994our promise was simple, to offer customers High quality food at an unbeatable priceand this commitment still stands.

And he added: “Great in qualityLidl in price It’s not just a brand slogan. It is a promise that embodies what our business stands for and summarizes our commitment to social responsibility and sustainability, which is fundamental to our DNA. Over the years, this has contributed to a significant changeor in the way British homes they buy their food“.

Among the main british supermarkets, Tesco leads with a market share of 27.5% and sales of 39.7 billion pounds (47.5 billion euros) in 2023, according to the financial data company Moneyzine. Tesco, one of the world’s largest retailers, has more than 6,000 stores in Europe and Asia4,074 of them in the UK, and employs more than 400,000 people worldwide. Sainsbury’s followsthe second British operator, with a share of 15.6%, and Asda, third, with 13.4%. Aldi has overtaken Morrisons and has become the fourth largest supermarket in the United Kingdom.

Although it occupies the sixth position, Lidl has the necessary financial muscle to fight for first place. It is part of the large German group Schwarz Gruppea family-owned retail group with more than 12,900 grocery stores, supermarkets, hypermarkets and discount stores in 33 countries. Lidl owners have ambition, industry knowledge and full pockets to further disrupt the UK supermarket sector.