Aldi has suffered a fall in full-year profits after ramping up its investment into its store portfolio and slashing prices.

The discounter said pre-tax profit fell 18% to £182.2m in the year to December 31, 2018, as capital expenditure swelled 19% to £531.1m. Total sales rose 11% to a “record” £11.3bn during the 12-month period.

Much of that growth was delivered by new store openings. Aldi is opening shops at a rapid rate and also invested £127m into its ‘Project Fresh’ strategy to revamp its existing stores during the year. The refits dedicate more space to the grocer’s fresh food proposition, which now accounts for around 50% of its sales.

But Aldi said it would invest a further £1bn in 2019 and 2020 and is focusing its growth plans on the Greater London region. It currently operates 45 stores within the M25 – inlcuding eight of its smaller Aldi Local stores – and wants to increase that footprint to 100 locations by the end of 2025.  

It has already unveiled plans to open new stores in Blackheath, Watford and Sydenham as part of that drive to increase its market share in London. Aldi currently accounts for just 3.4% of grocery spend in the capital, compared to 8.1% nationally. 

As part of its long-term target to reach 1,200 stores by the end of 2025, the grocer plans to open a further 100 stores across the UK by the end of 2020. Aldi currently has 840 stores across the UK and Ireland.

Aldi UK and Ireland chief executive Giles Hurley said: “London shoppers regularly tell us they would switch to Aldi if there was one nearby, so there is clearly a significant growth opportunity for us in the capital.”

He added: “For almost three decades we’ve proven that investment equals growth – investment in our infrastructure, our people and our prices.

“The commitment we have made to our customers to continue investing in the UK over the coming years remains as strong as ever.”