Market News & Analysis

Aldi announces plans for online shopping in the UK

Discount supermarket Aldi has announced that it will start selling goods online in the UK next year.

The online service will begin with the option for shoppers to buy wine by the case. Then, non-food products will become available online in the spring.

Customers will be given the choice of home delivery or collection from third-party locations. However, Matthew Barnes, chief executive of Aldi UK & Ireland said that the company would not necessarily start selling food online.

"I wouldn't say it's inevitable. Wine by the case and non-food is the most viable place for us to start," he said, adding that the retailer wouldn't want to do anything that would endanger its model or threaten its cost base.

Record sales

The announcement about selling online came as the German-based supermarket announced record annual sales for 2014. The firm's sales rose 31 per cent to £6.9 billion in the 12 months to December 31st. That's compared with £5.27 billion the year before. Operating profits, however, fell to £260.3 million from £271.4 million, partly due to price cuts.

Aldi also said that it was "on track" to open 65 new stores. It currently operates 598 stores in the UK and analysts say it is the sixth largest supermarket chain with a market share of 5.6 per cent in the 12 weeks to September 13th.

Rise of discounters

Aldi and its rival discount supermarket Lidl have both seen rapid growth in the UK in recent years. Mr Barnes said he was "very confident" there would be an Aldi store in every UK town in the future. The increase in these two brands has also put pressure on the existing "big four" supermarkets – Tesco, Asda, Sainsbury's and Morrisons.

Mr Barnes noted that Aldi was "consistently 42p cheaper per item than the market average". Consequently, the big-four supermarkets have had to cut prices to keep up.

Lidl also recently announced it would be the first UK supermarket to implement the minimum wage as recommended by the Living Wage Foundation. In response, Aldi said that 90 per cent of its staff already earned a wage above the foundation's recommendations.

From time to time, GAIN Capital Limited’s (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.