Aldi has suffered a dip in profits but plans to press ahead with an aggressive £1.3bn investment into the UK market over the next two years, as it targets 100 new stores.

The discounter reported a pre-tax profit of £264.8m in the year to December 31, 2020, a 2.5% drop year-on-year. Operating profit also slipped 1.2% to £287.7m. 

Aldi posted a 10.2% increase in sales to £13.5bn during the year, but it said profits had been “dampened” due to its focus on low prices and increased costs attributed to the coronavirus pandemic.

The number of customers shopping with Aldi edged up from 17.6m to 17.8m compared to 2019 levels, as Aldi reported that more than 60% of households shopped with the retailer in the past year. 

In a bid to further grow that customer base, Aldi pledged to invest £1.3bn into the UK market over the next two years, with plans to add an additional 100 stores to its existing portfolio of 920 supermarkets. 

The expansion plans will create 2,000 new jobs next year, following the addition of 7,000 permanent roles filled over the past two years.

Aldi has also placed increased emphasis on technology, expanding its click and collect service to 200 stores, partnering with Deliveroo and unveiling its first checkout free concept store in Greenwich, London.

Aldi Uk and Ireland chief executive Giles Hurley said: “Whilst 2020 was an extremely challenging year, our 41,000 colleagues stepped up when it mattered most - their dedication to the communities they serve has been nothing short of remarkable. Despite some of the most difficult conditions our sector has ever seen, our people underlined the strength, success and spirit of our business.

“As well as delivering record sales, we continued to invest for growth, deploying over £600m in stores and distribution centres across the UK. This helped to create thousands of much-needed jobs and support for British farmers and manufacturers.”