Midlands supermarket retailer worth £8.6bn to UK economy

Warwickshire-based supermarket retailer, Aldi contributed to the generation of more than £8.5bn in Gross Domestic Product (GDP) to the UK economy in 2016, a new report has revealed.

The report, published by the Centre for Economics and Business Research (Cebr), highlights the significant role the discount retailer has played in adding value to the UK economy and supporting British businesses.

The GVP contribution covers job creation, spending with British-based businesses, tax contributions and capital investment.

It concludes the GVP contribution will grow to £11.5bn by 2022 as Aldi reaches its target of 1,000 UK stores.

The report also predicts that Aldi’s growth during the next five years will provide a £2.2bn boost for British businesses, as the GVA of its UK supplier relationships will increase from £4.5bn in 2016, to £6.7bn by 2022.

This increase is a direct result of Aldi sourcing products manufactured or grown in Britain, whenever possible. Last year the supermarket worked with more than 1,000 UK businesses and generated 77% of its sales from products sourced via UK suppliers.

Cebr highlights how Aldi’s focus on British-based sourcing along with its efficient ways of working, deliver strong value for customers, as shoppers saved an estimated £2.2bn last year by going to Aldi instead of the Big 4 supermarkets.

Matthew Barnes, CEO of Aldi UK and IRE, said: “For the first time, this report demonstrates how the positive impact of Aldi’s low priced, high quality products stretches beyond our stores. Our approach to sourcing as local as possible means that shoppers are able to enjoy the best value products, with the confidence that they’re supporting British companies and jobs.”

Oliver Hogan, Director of Cebr, Economist and principal author of the report, added: “Aldi’s GVA contribution of £100 generating an additional £720 is impressive, yet logical when you take time to consider the retailer’s extensive links with the wider domestic and export economy.

“This is driven by the efficiency and flexibility of Aldi’s business model, which is set to continue to meet the cost and competitive pressures of the grocery market. Ultimately, this will help the supermarket to sustain growth and drive prosperity for the wider economy as Aldi’s supply chain is so heavily British-based.”

Key highlights of the report include:

• Aldi’s GDP footprint of over £8.5bn represented 0.5% of UK GDP in 2016. Growth in GDP achieved through job creation, spending with British-based businesses, tax contributions and capital investment
• Last year Aldi supported 146,000 direct and indirect jobs across the UK, which is equivalent to a 0.5% share of total UK employment in 2016. This catalysed the generation of an estimated £4.3bn in employee compensation
• By 2022, Aldi will support at least 205,000 direct and indirect jobs, which would generate an estimated £5.9bn in employee compensation. Employment at Aldi grew by an average of 21% annually from 2005-2016, a period that coincides with the recession, during which unemployment hit 8% in 2011/2012
• Shoppers saved an estimated £2.2bn last year by going to Aldi instead of the Big 4 supermarkets. Aldi’s focus on local sourcing and efficient business model result in exceptional value
• In 2016 Aldi worked with more than 1,000 UK businesses, representing over 77% of the cost of all goods it sold in the UK
• For every £100 of GVA generated by Aldi, an additional £720 of GVA contribution was generated in the wider economy in 2016
• Aldi’s activities catalysed an estimated £1.6bn tax contribution in 2016
• Between 2005 and 2016, Aldi has invested £3.2bn in its UK stores and distribution centres. With 726 stores and nine regional distribution centres across the country the retailer will continue to find the most efficient ways of working to translate this into savings for shoppers, while multiplying the value of how much every £1 consumers spend in Aldi delivers for the UK economy.