Aldi profit fall as it opens one store a week

ALDI’S profits tumbled by nearly a fifth as the supermarket price war took its toll.

The German discount grocer said that investment into cutting prices and expanding its reach had affected its bottom line, despite sales jumping to record highs.

Sales in the UK and Ireland rose 13.5pc to £8.7bn in 2016, with the company enticing more than 1m customers into its stores during the year.

revenues were partly boosted by a strong Christmas period, with December sales climbing 15pc in 2016. Operating profit, however, was down 17pc to £211.3m due to an ongoing investment drive.

Matthew Barnes, chief executive of Aldi UK and Ireland, said: ‘Since 1990, when we arrived in the UK, our approach has been based on the long game, not short-term profit.’

The company would do ‘everything and anything’ to keep its prices lower than its rivals, he pledged.

Last year Aldi committed £450m to opening stores and improving its UK and Ireland distribution centres. It plans to open a further 70 shops next year, more than one store every week, creating 4,000 jobs.

The supermarket plans to have more than 1,000 stores across the UK by 2022.

Barnes said: ‘Our growth is accelerating thanks to the hundreds of thousands of new customers switching their shop to Aldi.’

Like most supermarkets, Aldi, which employs 29,000 in the UK, has been trying to bolster its presence. The grocer is the fifth largest supermarket behind Tesco, Sainsbury’s, Asda and Morrisons. It has also wooed workers from rivals by paying more than the living wage at £8.53 an hour nationally and £9.75 an hour in London, compared to Tesco which is increasing its hourly staff wage from £7.62 to £8.42.