Supermarket’s profits remain flat despite soaring sales
Aldi achieved £10bn sales for the first time in 2017, but competitive pressures meant profits have remained largely flat.
Although sales have nearly doubled since 2013, pre-tax profits have not surpassed the level set five years ago.
The supermarket group is the UK’s fifth-largest supermarket, having overtaken Waitrose in 2015 and the Co-op at the start of 2017.
During 2017 Aldi increased sales by 16%, to £10.2bn, but pre-tax profits were up just 3%, to £221m. If profit growth had matched the increase in revenues since 2013, pre-tax profits would now be around £500m.
However the supermarket sector has been under significant pressure – partly as a resultant of the emergence of Aldi and Lidl – with Morrisons, Tesco and Asda all facing turbulent trading in recent years, resulting in the planned merger of Sainsbury’s and Asda.
The Warwickshire-headquartered retailer employs 33,000 people and last week revealed it plans to open 130 stores in the UK over the next two years, a move which would create 5,000 jobs.
Aldi, which has its UK head office in Atherstone, said the expansion drive would help it move towards a previously stated target of 1,000 stores by 2022. The group invested £447m as it opened 74 stores during 2017.
