Accounts filed at Companies House for the German group’s UK division showed that operating profit jumped from £18.7M to £102.9M in the year to 31 December last year, reports retail specialists, KamCity.
Turnover climbed 29% to £2.76Bn, as it attracted more cash-strapped customers and its existing customers did more of their shopping with the chain. The group's new stores accounted for only about 4% of the sales growth.
Aldi also returned to the black with a £57.8M post-tax profit compared with a £56M loss in the year earlier, when it was hit by a £58.5M property writedown.
The group revealed expansion plans that could see it double its UK stores over the next 10 years. Aldi opened 29 stores in 2011 and completed a major store refurbishment programme. It plans to invest £180M opening 40 new stores by the end of 2013, taking its estate to more than 500 UK stores.
Roman Heini, UK group joint managing director, said Aldi would look to open 35-40 supermarkets each year thereafter. It could potentially double its UK store base to 1,000 over the next 10 years, he said. “We still have many white spots on the map, so we still see more opportunities,” he said. However, Aldi, which opened its first store in the UK in 1990, said it faced competition for prime town centre sites from the big four supermarkets, for which small stores had become a “battleground”, and house builders, which were also targeting locations.
Aldi, which has been targeting more affluent customers with premium products, said it was now enticing more upmarket shoppers. “We’ve seen a shift in the socio-demographics,” said Heini. “Obviously we have kept the existing customers ... so we still have the C1, C2 and D customers but we certainly now also see more A and especially B customers in our existing stores and also in the stores we have opened this year so far.”
Heini added that he believed Aldi was winning customers from “basically all other retailers”.
Meanwhile, the group’s other managing director Matthew Barnes said that Aldi had transformed impressions of the chain by learning from past mistakes, in which the product range was not "tailored to the UK customer" and its fresh food offering was too limited.
"We've focused relentlessly on our fresh offer," Barnes said. "We've focused on our supply chain, spent a huge amount of money getting our fresh products to store quicker, expanding our range."
Barnes also said that investing in British suppliers meant that Aldi was beginning to change perceptions of the discounter by the British public. "Our supply base, our employees [are British], we reinvest all our profits into the UK business. We've been here over 20 years and we are as British as any other retailer in the UK market."
Consumers appear to be flocking to cheap supermarkets to reduce the cost of their weekly shop as inflation continues to rise. Figures released last month from Kantar Worldpanel showed that Aldi and Lidl saw their share of the grocery market grow by 26.6% and 10.9% respectively over the three months to August. This growth is far outpacing the growth seen by larger rivals such as Asda, Tesco and Sainsbury’s.