Aldi’s profits dip as it is hit by discounts

BUDGET grocer Aldi has blamed the supermarket price war for its first drop in profits for six years.

The German- owned grocer, which with rival Lidl forced the Big Four supermarkets to spend billions slashing prices, said ‘there is no doubt it has hurt us too’.

It also used its annual financial update to announce plans to sell online for the first time.

Sources say it has teamed up with distribution firm iForce, which also counts retailer Fortnum & Mason as a customer. iForce will store and pack the goods, which will then be delivered to customers by Parcelforce.

Aldi is using a warehouse in Corby, near Northampton, and yesterday began a four-week trial of the service, which the source said will launch nationwide before Christmas if successful.

Aldi denied planning a big preChristmas online push and said it will launch the service next year.

The grocer, which sells a fraction of the ranges stocked in the main supermarkets, made £ 250.6m profit last year, a 3.9pc drop from £260.9m the year before.

Over the year it opened 54 new stores, helping boost sales to £6.8bn from £5.2bn. It plans to open another 65 shops this year.

Figures from independent research firm Kantar show Aldi increased sales by 17.3pc, making it the UK’s fastest-growing food retailer over the past 50 months. This has pushed up its market share to 5.6pc.

Rivals have struggled to compete and Aldi chief executive Matthew Barnes claims its prices remain at least 15pc cheaper.

He said. ‘Our 15pc price gap is cast in stone and is a foundation of the business.

‘We believe price cutting is slowing as competitors realise they are not going to win that battle. Despite efforts to lower prices they are nowhere near Aldi.’