Market News & Analysis
Aldi announces plans for online shopping in the UK
City Index September 29, 2015 3:36 PM
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.
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.
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