German discount grocer Aldi has reported losses of £56 million for its UK operations last year, a report filed yesterday revealed.
Heavy investment in store renewals and the disposal of unwanted outlets led to the loss for the 12 months ending December 31st 2010, but trading was strong during the year as financially squeezed consumers tried to cut down on their food costs.
Sales for Aldi’s UK & Ireland business grew 4.6 per cent year-on-year in 2010, and with regular incremental market share increases since the turn of the year it is likely that sales will have been up for the retailer this year too.
Matthew Barnes and Roman Heini, Group Managing Directors, said: “We initiated a disposal programme of older stores and assets surplus to requirement two years ago. This programme has continued throughout 2010 and accounts for the whole of the loss.
“In 2011 we are beginning to see the benefit of the investment in our products and stores, with both increased turnover and profitability.”
Possibly the biggest compliment to Aldi’s current UK strategy is the recent price cutting scheme announced by Tesco, with the nation’s biggest retailer seeming to want to take back some of gains achieved by the German grocer and its fellow discounter Lidl.
According to the latest UK grocery data from Kantar Worldpanel, Aldi increased its market share by 0.6 per cent year-on-year last month to 3.5 per cent, with the retailer doing well to attract cash strapped consumers.