Aldi, the German discounter that has been winning customers from Tesco and Sainsbury’s, is to create 35,000 jobs in the next eight years as part of a plan almost to double its number of supermarkets to 1,000 by 2022.
Aldi has already set out plans to invest £600m in the UK over the next two years, primarily in new stores, at a time when grocery chains are scaling back their expansion.
Its success reflects a shift in the British retail landscape, as cash strapped middle class shoppers flock to the so-called hard discounters, Aldi and its rival Lidl, which is also expanding aggressively in the UK.
In the year to October 12, Aldi’s sales in the UK rose 31.7 per cent, while Lidl’s rose 18.8 per cent. In contrast, Tesco’s sales fell 2.2 per cent.
The British arms of the two German retailers have been winning more affluent shoppers by improving the quality of their food and introducing more premium products. This Christmas Aldi will be selling caviar and a whole cooked crab, while Lidl’s festive range includes legs of serrano ham and whole lobsters.
They have also been opening in more upmarket areas, including Knutsford in Cheshire and Canterbury in Kent, and investing in glitzy advertising campaigns.
But Britain’s biggest supermarkets have pledged to spend billions cutting prices to stem the growth of Aldi and Lidl.
Supermarkets such as Asda, the British arm of Walmart, the world’s biggest retailer, and Wm Morrison, are cutting back on special offers and lowering the prices of products across the board. J Sainsbury has even teamed up with Dansk Supermarked, to bring discounter Netto back to the UK, with their first store opening in Leeds last week.
According to Clive Black, analyst at Shore Capital: “The free lunch that the limited assortment discounters Aldi and Lidl, have had in recent years in the UK is coming to an end in our view as imploding superstore groups finally react.”
On Monday prime minister David Cameron met Aldi’s group managing directors Matthew Barnes and Roman Heini at the grocer’s UK headquarters in Atherstone, Warwickshire.
Mr Barnes said: “Our expansion plans mean that we can accommodate growing shopper numbers, while ensuring that there is an Aldi store only a short drive away from people, no matter where they live in the country. We are opening our doors across the UK, making it even easier for people to shop and save with us.”
Mr Cameron said Aldi’s plans to create more jobs across the country was a vote of confidence in the government’s economic plan. “This news will mean more financial security for hardworking families and opportunities for young people who want to get on in life.”