Dscounters Aldi and Lidl have continued their British surge, with Aldi UK as the most successful: it has grown its market share 1.1 % in the 12 weeks leading up to 20 July 2014.
Aldi nearly as large as Waitrose
Kantar Worldpanel has labeled the continuous growth of both discounters in the British market as "familiar trends". It follows the trend that market leader Tesco and struggling Morrisons have suffered the most under the discounters' barrage.
Aldi managed a 32 % turnover growth in the 12 weeks leading up to 20 July 2014. Its spectacular 1.1 % market share growth have pushed Aldi UK to 4.8 % of the total revenue of the British food market. It is also an Aldi record, which is now Britain's seventh retailer, barely smaller than "good old" Waitrose which has a 4.9 % market share.
Waitrose also managed to increase its market share ever so slightly, with an above average 3.4 % turnover growth, barely enough to stay ahead of the blistering pace of Aldi. Lidl also broke a record, reaching a 20 % sales increase in the 12-week period, as it now has a never-before-seen 3.6 % market share.
New 760 million euro investment
Aldi UK has gained a lot of confidence from its record-breaking market share and its rapid growth that it has finally agreed to do an interview, which is rare for this usually quiet retailer. The two managing directors, Brit Matthew Barnes and German Roman Heini, have divulged that the company will invest another 760 million euro to continue its British growth.
Both have worked at Aldi for 17 years, starting as trainees, but they have been in charge of the British branch since 2010. Stores will be remodeled, 60 new stores will arrive in 2015 and a new logistics center as part of the new investments. It will also open a new store in the London region, in the footsteps of its pilot store in April 2013.
"Online is hardly successful"
These investments should help the company grow, but both Aldi managers have already revealed that Aldi UK will once again present excellent numbers for its full fiscal year. Expectations are that these have grown 25 % year-on-year, reaching 6.3 billion euro.
"‘I’m glad we don’t have huge complex beasts with online, banking, huge ranges and I am thankful what we have is simple,’ he says. ‘This has enabled us to be close to the market. There is no clear evidence that online is a profitable model. The fastest growing retail is bricks and mortar. No one does what we do", Heini stated, referencing the fact that Aldi only has some 1,500 products for sale, while several other competitors carry more than 40,000 products.
It is undeniably true, for both Aldi and Lidl, that bricks and mortar are the fastest growing retail branch, but it remains to be seen whether the same can be said for other British retailers.