German discount supermarket chain Aldi confirms plans of growing popularity by doubling the number of stores in a £600m investment.
A proposed £600m investment was confirmed when the Prime Minister visited its UK headquarters in Warwickshire. The investment will include a doubling of its store number to 1,000 by 2022.
Aldi opened 42 stores last year and is on course to open 54 this year, with another 60 to 65 for 2015. Aldi has now more than 7,000 stores across three continents.
Also, Aldi plans to create at least one apprenticeship position per store during one year. The new jobs will include a range of management roles as well as in- store and regional distribution center jobs. This will be supported by a new academy located at Aldi’s HQ and distribution center in Bolton, which is scheduled to be opened in March.
David Cameron supports Aldi’s plan and claims that it is a vote of confidence in long- term economic plan to support business, create more jobs and secure a brighter future for the UK.
The battle between supermarket chains
Along with its fellow German counterpart Lidl, the chain has been putting the “big four” supermarket chains under pressure with lower prices that have proved to be popular with consumers. The approach of buying more locally produced products and expanding its fresh food range helps to grow Aldi’s market share and drive the investment in the UK.
Aldi grocery market share stands at 4.8% in the UK, higher than Lidl’s 3.5% and closing in on Waitrose’s 5.1% share. For comparison, Tesco has 28.8% and Asda is second with 17.4% for the 12 weeks to September.
The budget brands manage to keep their prices down by offering a limited number of products and so are able to benefit from the economies of scale. The strategy means shoppers often find their shopping lists bought at the budget supermarkets come out considerably cheaper than at the traditional stores. The growing popularity of the budget supermarkets suggests that shoppers are happy to prioritize low prices and good value over variety.
The announcement is just the latest move in the unstoppable rise of the budget supermarkets, which have attracted savvy shoppers in their droves with the promise of good- value basics and cut- price luxuries.