By Eamon Quinn
Aldi is on target to open four more new stores in Ireland by the end the year as the discount retailer confirmed sales in Ireland and the UK surged past the £10bn (€11.2bn) level last year. The German retailer which has an 11.6% share of the about €11bn shoppers spend annually on groceries in Ireland, has 133 stores here and 775 in the UK.
After opening three stores earlier this year, it has earmarked Youghal, Co Cork, and sites in Co Clare, Co Kilkenny, and south Dublin for new stores by the end of the year. Aldi is the smallest of the big five supermarkets that account for almost 90% of Ireland’s grocery spend.
However, its market share is only slightly behind fellow German discounter Lidl, according to the most recent Kantar Worldpanel Ireland survey, and combined, the market shares of Aldi and Lidl is 23.4%.
Tesco is the single largest supermarket, with a 22.1% of grocery sales, followed by SuperValu at 21.7% and Dunnes at 21.6%, according to Kantar Worldpanel.
In the UK, Aldi aims to have 1,200 stores by the end of 2025 as it seeks to grab more market share from its bigger listed rivals. Aldi has about 775 stores there and had been aiming to exceed 1,000 by 2022.
Aldi is the UK’s fifth biggest supermarket with a 7.6% market share, trailing market leader Tesco, which has more than 3,400 stories, Sainsbury’s, Asda and Morrisons. The new stores add pressure on established chains to respond.
Sainsbury’s is seeking to buy US Walmart-owned Asda, arguing that the rise of discounters opens new fronts in competition, while Tesco launched a budget chain called Jack’s. Aldi UK and Ireland chief executive Giles Hurley said the firm opened 70 stores in the UK in 2017 and was on track to open 70 more in 2018 and 130 between 2019 and 2020.
After that, it planned to open 50 to 60 stores a year in the UK to reach 1,200, focusing on towns where Aldi was not present, he said. He said Aldi would be interested in buying Sainsbury’s and Asda stores that the regulator could force them to sell as a condition for approving their proposed merger.
HSBC analyst David McCarthy said Aldi UK’s plans stepped up the challenge for its listed British rivals. “There is no let-up in either Aldi’s expansion or its sales growth. That it is growing its fresh and premium range and expanding nationwide, means its market share growth looks set to continue,” he said.
Aldi UK and Ireland made an operating profit of £265.9m (€300m) in 2017, up 26%, with sales rising 16.4% to £10.18bn.
Additional reporting Reuters