Christmas sales at Aldi topped £1bn for the first time as the German-owned retailer continued its rapid expansion in the UK.
Sales rose 7.9% in the four weeks to Christmas Eve compared with the same trading period of the previous year.
The increase marks a slowdown from 2018, when UK sales were up by double-digits in the week before Christmas. New store openings bolstered this year’s figure by 5-6%, suggesting underlying sales rose by about 3%, according to analysts at GlobalData. The company did not report a like-for-like sales figure.
“Aldi must now face the fact that it can no longer hope to achieve the same domineering double-digit growth it has done over the past decade,” said Thomas Brereton, a retail analyst at GlobalData.
Like-for-like sales have become the benchmark in the City for judging the current performance of retailers. Typically represented as percentage growth rates, like-for-like sales measure sales at stores that have been open for at least a year, stripping out the impact of sales at newer stores. The idea is that they allow a more transparent comparison of a retailer’s sales performance over a certain period of time, when compared with the same period of time a year earlier.
However, there is no formal industry standard. This means that some companies include new extensions to stores in their like-for-like sales, while others include sales generated by a customer paying with a voucher. Critics of the measure say that like-for-like sales do not always give an accurate picture of a retailer’s health. They argue that of greater relevance is profitability and how well a company is adapting to challenges such as the living wage and online shopping revolution.
Aldi has been rapidly opening stores as it aims to increase its UK chain from 874 shops to 1,200 by 2025. The growth has weighed on profits as it pours money into new stores and cutting prices to lift sales. Figures published in September showed that Aldi’s 2018 profits fell by almost a fifth as it invested £530m in expansion.
It has an 8% share of the UK grocery market, having increased by 0.4% during the past 12 months, it said. It is the UK’s fifth largest grocery retailer.
The arrival of Aldi and its German rival Lidl has challenged incumbent competitors. The companies’ combined market share rose from 13.2% to 14.1% in the 12 months to the end of November 2019, according to data from Kantar Worldpanel. Tesco and Sainsbury lost 0.3 percentage points of share in the same period, to 27.3% and 15.7% respectively, while Morrison lost 0.4 points to 10.1%.
Aldi said increased sales of alcohol, meat and its premium Specially Selected range were behind the sales increase. Sales in the beers, wine and spirits category increased by 9.2% year on year, with sparkling wines up by 14%, while sales of Specially Selected products and meat rose by 8%.
Giles Hurley, the Aldi UK chief executive, said: “More customers than ever before shopped with us this Christmas. Although we saw strong growth across all key categories, sales of our premium Specially Selected range surpassed expectations.”
During the period, Aldi sold 55m mince pies, 22m pigs in blankets and more than 2m Christmas puddings.
