Aldi UK chief executive Paul Foley has admitted that the hard discounter will not hit its store-a-week opening target but vowed that there is still strong growth potential for the German grocer.
Foley last year vowed to open a store a week until Aldi reached its 1,500 shop target, driven by the meteoric rise the hard discounters were experiencing in the recession.
Foley said there are still 1,500 “dots on the map” but that this year it would only open between 40 and 50 shops – it has 467 shops at present. He said: “We need car parking and access, and while we are getting lots of interest from local councils now, it is difficult finding the right locations. There have also been some problems with developers in finishing projects.”
Aldi has enjoyed phenomenal growth as shoppers seek out bargains in the recession and Foley said 50 per cent of its customers are now from the ABC1 demographic.
However, last month’s TNS figures found that in the 12 weeks ending June 14, food shoppers “have started to revert to pre-recession behaviour” as the established big grocers are outpacing the discounters such as Aldi and Lidl.
Foley maintained: “It would be a little stupid to believe the discount craze is over just because of a month of slower growth.”
He said growth had been slower in the period because big brands have started to promote their products heavily. “When branded product goes on promotion, I see that in my sales,” he said.
Aldi insists its product is of similar quality to branded goods. “If customers have decided that’s the level of quality they want, that’s the market I’m in,” said Foley. “It doesn’t matter if supermarkets go on promotion for value or discount ranges, as that’s not where we sit.”
He said the level of promotions by big brands was “not sustainable”. He added: “The question is can they keep it up and what’s my next move? As we get bigger and more powerful we will find ways of lowering our prices permanently.”
Foley said that Aldi is still generating “high single-digit like-for-like growth” and was confident that shoppers will not want to return to paying more for the same quality when the recession ends.