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Aldi Says Inflation Has Changed How UK Shoppers Buy Groceries

Aldi UK grocery store

Discount supermarket chain Aldi said it has experienced record sales in the United Kingdom as shoppers seek affordable groceries.

In response to this increased demand, Aldi has pledged to invest 1.4 billion pounds ($1.71 billion) to expand its reach and serve more communities across the U.K., the company said in a Monday (Sept. 25) press release.

“Although inflation is easing, households are still under real pressure from higher living costs,” Giles Hurley, CEO for Aldi U.K. and Ireland, said in the release. “As a result, Britain is shopping very differently to how it did 18 months ago — fewer trips, more own-label products and switching supermarkets in search of better value.”

In the past year alone, Aldi has attracted around 1 million new customers, according to the release. Annual sales grew by almost 2 billion pounds ($2.44 billion), reaching a record-breaking 15.5 billion pounds ($18.93 billion) in the 12 months leading up to December.

Aldi’s success can be attributed to its ability to provide value to consumers during a time of rising living costs, the release said. The cost-of-living crisis in Britain has significantly impacted consumer attitudes and shopping habits, leading more people to seek out affordable options for their grocery needs.

In fact, Aldi has become Britain’s fourth-largest supermarket, with two-thirds of British households now choosing to shop at Aldi, per the release.

“What we’re seeing is a new generation of savvy shoppers who’ve turned their back on traditional, full-price supermarkets in favor of transparent, low prices, which is what we’re famous for,” Hurley said in the release.

Aldi has already invested over 350 million pounds ($427 million) in price reductions this year, with further reductions planned in the lead-up to Christmas, according to the press release.

The company also plans to expand. Aldi aims to open 18 new locations before the end of the year and has committed to opening up to 500 more stores across the country. 

Grocery chains worldwide are slashing prices to remain competitive, PYMNTS reported in June. They are doing so as they are forced to choose between protecting their margins and losing more share to discount retailers.

In the United Kingdom, food has surpassed fuel as the largest contributor to the country’s inflation rate, the Financial Times (FT) reported in May.