The annual UK results of discount supermarket giant Aldi have undermined analysts' and others' obsession with market share.
On Monday, Aldi (which is number three here in Australia) revealed record revenues and earnings for its latest financial year (ended December 2023). However, many reports also focused on a 0.2% loss in the company’s share of the UK supermarket sector.
“Aldi has lost market share despite achieving record sales,” read one report on a UK trade website. Other reports, including in the Financial Times, mentioned the tiny loss of share in the same breath as not only record sales but also a more than doubling in earnings for the year.
The share loss saw Aldi end up with a 9.3% share of the UK supermarket sector’s sales at the end of last year, down from 10.2% in August. However, it rose back up to 10% in April.
Aldi reported record sales of £17.9 billion ($A35.2 billion) for the financial year, up 15% from the £15.5 billion reported in the prior 12 months.
Aldi more than tripled pre-tax profit to £536.7 million ($A1.054 billion) for 2023, up from £152.6 million ($A299 million) in 2022.
With such an earnings surge, the small dip in market share was immaterial.
At 10%, Aldi was still the fourth-largest supermarket group in the UK, just ahead of Morrisons with 8.6% and fellow German discounter Lidl (owned by another branch of the same German family) with 8.1%. Tesco remained the largest, with 27.6% over 2023.
Aldi’s share has risen from 6.8% in 2017, while Tesco’s share has barely changed in the past seven years, remaining anchored around or just above 27%.
Aldi said the record result was driven by “greater efficiencies across its stores and central functions.”
The new figures come as Aldi plans to open 23 new stores before the end of 2024, including in Muswell Hill, London, and Caterham, Surrey.
This expansion is part of its record £800 million annual investment program for this year and £1.4 billion by the end of next year. Aldi also plans to refurbish 100 outlets, which will help drive same-store sales growth.
Aldi has more than 1,000 stores across the UK. It has 595 in the smaller Australian market.
