Aldi takes aim at rivals after 15% festive sales surge

Discount supermarket chain Aldi took aim at upmarket retailers Waitrose and Marks & Spencer as it posted record sales over Christmas period.

Aldi said its customers can get the quality of upmarket rivals' products 'at a fraction of the price'. Picture: Michael Gillen
Aldi said its customers can get the quality of upmarket rivals' products 'at a fraction of the price'. Picture: Michael Gillen

Total UK sales were up 15 per cent in December compared to the previous year, with the German retailer reporting that its premium lines achieved above-forecast growth of 27 per cent.

Although upcoming figures from the “big four” grocers are expected to show they are successfully fighting back, Aldi’s UK chief executive Matthew Barnes said his firm’s performance was a “clear sign” that the chain was taking custom away from upmarket rivals.

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He said: “Sales of our premium specially selected range in particular surpassed expectations – a clear sign that more and more people are realising they can treat their families to products of a quality comparable to Waitrose and M&S at a fraction of the price.”

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Aldi, which employs 2,000 staff in its 72 stores north of the Border, predicts sales of its specially selected lines will exceed £750 million in 2017, just over a decade after the range was launched.

The chain sold more than 13.5 million bottles of wine, Champagne and prosecco during December and said a special promotion on fruit and veg sales also boosted sales. Among the chain’s best-selling premium products were Argentine Malbec wine, mince pies and a 30-day aged beef roasting joint.

However, the group did not disclose its like-for-like sales for the period, a more widely used industry measure of performance, and suggesting strongly that much of its growth will have been down to new store openings.

Experts believe Britain’s biggest supermarkets are expected to have fought back strongly in the battle for Christmas shoppers.

City analysts predict Tesco, Morrisons, Sainsbury’s and Asda have all performed better than in previous years, when they have taken a hammering from Aldi and Lidl.

Morrisons today reported a better-than-expected 2.9 per cent increase in like-for-like sales for the nine weeks to 1 January and raised its full-year earnings outlook, pencilling in underlying pre-tax profits of between £330 million and £340m.

Sector giant Tesco is expected to report UK like-for-like third quarter sales growth of up to 2 per cent on Thursday. It would represent the fifth straight quarter of underlying growth. Shares in Tesco were one of the FTSE’s strongest performers during 2016.

Last week Aldi upped the pressure on its rivals after announcing it will increase pay to at least £8.53 an hour and £9.75 in London from next month.

Aldi is also recruiting 4,000 permanent employees across stores and warehouses over 2017 as it looks to open around 70 new shops.

Last week experts from the KPMG/Ipsos Retail Think Tank warned that political uncertainty fuelled by Brexit and a new US president mean retail growth in Britain will stagnate in 2017 with a rise of just 0.5 per cent forecast.

• Aldi has highlighted its ambitions to grow in Scotland in 2017, planning to open six stores to bring its total outlets north of the Border to 78 and staff to 2,600 by year-end, writes Emma Newlands.

The locations comprise Oxgangs in Edinburgh, Glasgow’s Auldhouse Retail Park, Dumfries, Montrose and Drumchapel. Richard Holloway, managing director for Aldi Scotland, said the growth comes after it opened eight Scottish stores last year and aims to expand its list of local suppliers.