Profits at discounter Aldi rocketed after the retailer took more than 1 million customers from larger rivals last year.
Aldi UK recorded a 40.6% increase in sales to £3.9bn in the year to December 31, 2012 as pre-tax profits more than doubled to £157.9m.
Accounts due to be filed at Companies House today show that its operating margin was 4.4%. Operating profits rose 67.2% to £172.1m.
Aldi is to invest £400m and will open 100 new stores across this year and 2014. The grocer invested £116.5m in opening 34 new UK stores in 2012.
The big four grocers have been forced to fend off the attack from Aldi, and all but Sainsbury’s have experienced market share falls in recent months.
Asda has lowered the price of key lines that its shoppers buy from Aldi. However, Aldi’s average basket size has risen to £18.63, just below Sainsbury’s and Morrisons’. Aldi has a 3.7% market share, according to Kantar Worldpanel.
Aldi has also made a play for more affluent shoppers by introducing lobster to its range.
It added that its Specially Selected produce range has driven sales “enabling customers to treat themselves to exceptional quality produce without breaking the bank”. The size of the range almost doubled last year, with sales growing by 40%.
Aldi joint managing director Roman Heini said: “Whichever figures you look at, they all tell the same story of Aldi growth. Experts talk about polarisation among supermarkets as, along with Aldi, Waitrose is experiencing growth. We believe growth is down to one thing – customers demanding true value. They know they can always get high quality at low prices at Aldi.
“We have always been seen as a top-up shopping destination and that has changed now. Most shoppers see us today as a weekly shopping destination.”
Matthew Barnes, also joint managing director, said: “We have done everything we can to shield customers [from commodity price increases]. Our price discount on things like fresh meat has grown significantly in the past year, because we have not passed on anything like the costs [others have done].”
Aldi said the horse meat scandal earlier this year had been a “shock” to the food industry and the retailer had learned from it.
Aldi UK paid £30m in tax in 2012 and will pay £45.3m after last year’s record results.
Barnes added: “Our 2012 results provide us with a solid foundation for future growth and expansion, and we have continued to meet and exceed customer expectations in 2013.
“We are looking forward to Christmas, with many exciting products due in store, including a luxury Serrano Ham leg and a fresh Three Bird Roast. In fact, we have doubled the size of our Christmas range this year, making it our biggest ever. We are continuing to give British shoppers what they want and they are turning to Aldi in ever increasing numbers, delighted by what they find.”