retail

Aldi commits to ‘lowest prices’ after strong Christmas trading


Discount chain Aldi has committed to offering customers the “lowest grocery prices” this year, setting the stage for a renewed supermarket price war as customers grapple with surging living costs.

Giles Hurley, chief executive of Aldi UK, said that while 2021 had been a “long and difficult year” for many, looking ahead, “the top priority for most families this year will be managing their household budgets in the face of rising living costs”.

“As the cheapest supermarket in Britain, Aldi will always offer the lowest prices for groceries, no matter what,” he added.

He made his comments as the German-owned group reported on Monday its “best ever Christmas”, with a 0.4 per cent year-on-year rise in revenues in December. Sales were 8.1 per cent higher than in the same period in 2019.

It was the “only major supermarket” to see boosted sales in December, according to market research company Kantar, it added.

Aldi and discount rival Lidl lured consumers with their no-frills proposition after the financial crisis, spurring larger rivals to cut prices as they sought to stem the loss of sales and triggering an aggressive supermarket price war.

The discounters have continued to take share from the biggest supermarkets, however, prompting rivals including Tesco and J Sainsbury to launch Aldi price-match promotions last year.

Aldi’s price commitment comes as UK households are facing a cost of living crisis due to rising food and energy prices. Supermarkets including Wm Morrison, the country’s fourth-largest grocer, have warned that the cost of groceries is set to climb further, driven by higher commodity prices and freight rates.

Grocery price inflation of 3.7 per cent added £15 to consumers’ shopping bills in December, according to Kantar.

Rising energy bills, as a result of soaring wholesale gas prices, led to the consumer prices index hitting a 10-year high and are expected to increase further.

Tesco chair John Allan said in September that food prices could rise roughly 5 per cent over the coming months as a result of higher commodity prices and supply chain disruption.

Aldi also reiterated its plans to create 2,000 jobs in 2022 and to invest £1.3bn over two years, opening 100 new stores and distribution centres.



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