Aldi’s Expansion Plan

Posted on 18 September, 2019 by admin

Good news for commercial property landlords and landowners as Aldi maybe looking to expand in your area.

An ambitious plan has been put forward today by Aldi’s boss, Giles Hurley. The company is planning to open a new store in the UK every week on average for the next two years.

In order to achieve its goal, the discount supermarket chain will be looking to invest £1 billion.

ALDI Source Wikimedia Commons

Mr Hurley believes that the company is not maximizing the market opportunity as it has been reported that almost 50% of the British population do not shop at the retail store.

“…The main reason for that is they don’t have a store near us,” said the Aldi boss.

The pledge comes has profits fall last year even though the company reported a rise in sales.

In 2018, Aldi attracted more than 800,00 new customers, adding an extra £1.1 billion in sales, up 11% on the previous year. The growth was generated by additional stores opening.

The fall in profits was partly due to the company keeping its competitive edge by cutting store items.

Aldi is still expanding whilst the big established supermarket chains have rained in their rate of expansion, allowing the company to gain customers and increase their market share, which is set to continue.

“Over the next two years we’re going to invest a further billion pounds in the UK and that shows our intent,” said Mr Hurley.

Part of the expansion plan is to increase stores in the capital, London. Now the company only has 45 stores inside the M25, by the end of 2025, Aldi’s aim is to increase that to 100.

Mr Hurley said, “Within Greater London, our market share is around half of what it is in the rest of the country so there’s clearly a big opportunity for us to expand the business. In the long term, we can comfortably see us opening 200-250 stores within London.”

However, with Aldi’s current low-cost business model it may not be as straightforward.

For one London will prove tricky, as its harder to find good locations with parking spaces.

“So, you have to have a very flexible model and Aldi is so formulaic as discounter that this is harder to manage,” says Adam Leyland, editor of the Grocer Magazine.

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