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Hasn’t Aldi grown?

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It has been a big few weeks for budget retailer Aldi, which recently announced plans for further expansion.

The discount supermarket has escaped the ‘Big Four’ battle between Asda, Sainsbury’s, Morrisons and Tesco. Instead, it has made the most of the price wars and has continued to profit from its consistently cheaper prices.

Aldi is also celebrating 25 years since the opening of its first UK store this year - what better way to celebrate than to push for more stores?

Increase size

Aldi will open more stores in the UK this year, making its store count larger than the ‘Big Four’ supermarkets combined. The German discounter is looking at 60 new locations, which should provide it with 1m sq ft of space.

The details were published in a report by Colliers, a commercial property research IPD and property agent which underlines that Aldi is to expand by almost twice the size of Asda in 2015, and five times the amount of Tesco (currently Britain’s largest supermarket), which is hoping to open an extra 170,000 sq ft.

2015’s expansion is starting with immediate effect, with Thursday 26 March marking the company’s first Amesbury, Wiltshire store opening.

Marketing

The grocery chain has beaten competition out of the way to be named as the first official supermarket sponsor for Team GB, in a deal that is estimated at £10m.

Chairman of the British Olympic Association Lord Coe said, “Their support is a huge boost in our efforts to get the nation inspired in the run up to the Rio 2016 Olympic Games.”

Aldi created an online video to mark the occasion, with Team GB athletes walking around an Aldi store- the use of ‘star names’ at its finest.

Online store UK

Aldi ventured into online retailing in Australia 2 years ago, where it sells alcoholic drinks via the internet, so what of its plans to do the same in Britain?

All in good time.

A spokesperson recently said “It is an area we monitor as part of our customer-focused approach” but “e-commerce is not an immediate focus for Aldi as we currently have the best performing business model in the grocery sector”.

Big Four

While Aldi is enjoying its time in the limelight, the ‘Big Four’ retailers aren’t enjoying as smooth a ride. Tesco announced that it would close 49 stores this year, while Morrisons are planning to terminate 23.

The pace of expansion across all four of the supermarkets is decreasing although Tesco did announce a ‘property swap’ last week, which will see it buy back 21 of its stores.

After Morrison’s profits halved last year, leaving it with its lowest results in eight years, Andrew Higginson, former Tesco Finance Director and current Chairman of Morrisons, said: “We’ve got to re-establish trust back in the prices and that’ll take some time”.

Ben Miller, Director of Retail Insight of IGD thinks that Aldi should focus on its ecommerce channels, “As more shoppers conduct main shops in discount stores, an online offer would serve to make shoppers’ lives easier and encourage shoppers to increase spend.”

2015 is the opportune time for Aldi to get ahead of the supermarket game and truly establish itself as a leading retailer.

Published on Tuesday 24 March by Rachel Gee

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