Aldi unveils plans for 70 new United Kingdom stores

Aldi unveils plans for 70 new United Kingdom stores”

German budget grocer Aldi's quest for United Kingdom domination continues as its sales growth picked up in the United Kingdom, though profits dipped in its full-year results.

Aldi and fellow German chain Lidl have led the wave of price-cutting in recent years that has driven down the margins of the likes of Tesco PLC (LON:TSCO), J Sainsbury plc (LON:SBRY), Asda and WM Morrisons PLC (LON:MRW).

With the traditional supermarkets chopping down prices, Aldi has been forced to do the same in order to maintain its value proposition.

However, operating profit was down 17% to £211.3m as Aldi invested over £450m of capital expenditure opening new stores and improving its distribution centres in the United Kingdom and Ireland.

Aldi, which has 726 stores across the United Kingdom, said its sales growth was driven by more than one million new customers switching to the supermarket during 2016.

The supermarket is the UK's fifth largest, holding a 6.9 per cent share of the market.

For the year to December 31 2016 the British arm of the German discount supermarket Aldi Sud made an operating profit of 211.3 million pounds ($286.2 million), down from 255.6 million pounds in 2015.

The company said a further 150 stores would open next year under its "Project Fresh" initiative - a £300m investment programme to create more space for fresh, chilled and food-to-go ranges as well as simpler layouts, improved fixtures and wider aisles.

The strong performance looks to have continued into 2017, with Aldi noting that like-for-like sales were "strongly positive" in 2016 and had accelerated this year.

Matthew Barnes, chief executive for Aldi UK and Ireland, said: "Our growth is accelerating, thanks to the hundreds of thousands of new customers switching their shop to Aldi".

Aldi said that its future capital expenditure plans remained unaffected by the UK's decision to leave the European Union and expects investment in 2017 to total £459m.

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