Analysis: How low can Aldi go on margin?

Aldi's margins fell last year

While trumpeting another successful year, Aldi’s annual results showed steep downturns in both operating and pre-tax profits, as it slashed prices amid ferocious competition. Retail Week looks at how low Aldi can afford to go on margins, and what that means for the wider grocery industry. 

Unveiling results for the 52 weeks to December 31, Aldi UK and Ireland chief executive Giles Hurley was in celebratory mood. The figures, he said, showed that the value giant had achieved yet another “record year”, disrupting the UK grocery sector and winning customers, sales and market share from rivals.

An 11% increase in sales to more than £11.3bn, and a 5% increase in customer numbers to in excess of 16.6 million, were certainly worth crowing about. But the retailer also reported some eyewatering slumps in its operating and pre-tax profit columns – the former was down 26% to £197.9m and the latter fell 18% to £182.2m.

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