London: Aldi UK has announced a sweeping two-year investment plan worth £1.6 billion, aimed at ramping up its store presence across Britain. The German discount retailer’s move comes despite a notable dip in profits, underlining its long-term strategy to secure a bigger slice of the highly competitive UK grocery market.
At present, Aldi operates about 1,060 stores nationwide. Under the new plan, the supermarket chain will open 21 new stores over the next 13 weeks, followed by 80 additional outlets within the next two years. The discounter’s longer-term vision is even more ambitious, with a goal of expanding to 1,500 stores, placing it in direct competition with some of the UK’s biggest grocery chains.
The expansion push follows a challenging financial year. Aldi’s UK operating profit slipped to £435.5 million in 2024, as the company absorbed rising costs linked to staff pay increases, infrastructure development, and aggressive price cuts. These price reductions, while narrowing margins, were designed to win customer loyalty at a time when cost-of-living pressures continue to influence consumer behaviour.
Industry analysts note that Aldi’s strategy reflects a high-risk, high-reward approach. By expanding rapidly during a period of tighter margins, the retailer is betting that its low-price appeal will draw in more shoppers, particularly those shifting away from traditional supermarkets. In recent months, Aldi’s sales have grown by 4.8% year-on-year, bringing its market share to 10.8%, edging it closer to rival Asda.
The investment will not only go into new store openings but also into strengthening the retailer’s logistics and supply chain. New distribution centres, expanded warehousing, and technology upgrades are expected to support the rollout, ensuring that Aldi maintains efficiency even as its footprint grows.
For competitors such as Tesco, Sainsbury’s, and Asda, Aldi’s bold expansion is a warning shot. Analysts predict intensified competition in pricing, promotions, and store formats as rivals work to retain their customer base. Discount rival Lidl is also likely to be watching closely, as both German chains battle for dominance in the UK’s discount grocery space.
However, challenges remain. Rising labour costs, energy bills, and property expenses will continue to pressure margins. Moreover, the company must balance rapid store openings with maintaining quality and service standards, a crucial factor in retaining customer trust.
Still, Aldi’s latest move signals its determination to reshape the UK grocery market. With inflation and economic uncertainty keeping household budgets under strain, its focus on value pricing and wider accessibility may resonate strongly with British shoppers in the years ahead.