Aldi steps up price war with Tesco as sales reach £10bn

ALDI has promised a fresh supermarket price war after Tesco vowed to be the ‘cheapest in town’ with its discount chain Jack’s.

The German grocer pledged to be never beaten on price after raking in record sales of £10bn in the UK and Ireland last year, an increase of 16.4pc.

Aldi is planning to open 130 stores over the next two years – taking the total to more than 900 – as demand for its low-cost groceries continues to soar.

Profits jumped 26pc to £265.9m last year as it welcomed 15.8m customers through its doors – one million more than the previous year.

In what appeared to be a dig at Tesco following the launch of Jack’s, Giles Hurley, chief executive of Aldi UK, said: ‘While other grocers introduced more complexity into their businesses in their struggle to win back customers, we stuck to our guns and focused on doing what Aldi does best – buying smart, staying lean, improving quality and keeping prices low.’ The rise of Aldi and fellow German chain lidl has worried traditional supermarkets which are losing customers to the pair.

Sainsbury’s and Asda are planning to join forces in a £14bn merger, partly in response to the increasing popularity of the discounters with British shoppers. And Tesco, the UK’s largest supermarket, last month launched Jack’s which has been described as a copycat version of lidl and Aldi.

But Hurley brushed off the potential threat. He said: ‘It’s important to stress that we will never be beaten on price.’

SAINSBURY’S is going head to head with Boots and Superdrug with a major makeover of its beauty business which will include larger department store-style layouts and dedicated advisers.

The supermarket will stock new brands and overhaul its own range which will feature 100 products. It is also launching The Fragrance Shop concessions in two of its stores.