Aldi opened its 1,000th UK store on Thursday and committed to a further 500 outlets in the country as the German discount grocer snatches market share from rivals.
The supermarket had previously aimed to have 1,200 stores by 2025 and is now targeting 1,500 over the long term, Aldi said Thursday. That’s ambitious growth for a company that opened its first store in Britain in 1990.
“We’re looking for new Aldi stores from Hackney to Harrogate and Bath to Brentwood,” Giles Hurley, chief executive officer of Aldi UK and Ireland, said in a phone interview. “We’ve had an unwavering will to grow in the UK and that’s been backed up by capital.”
UK shoppers have been flocking to Aldi as inflation erodes their purchasing power during the cost-of-living crisis. The discounter became Britain’s fourth-largest grocer last year, knocking Morrisons off the spot, and now £1 in every £10 spent at UK supermarkets is at Aldi.
Read More: The Unstoppable Rise of Aldi in Britain Shows No Sign of Slowing
Shoppers are turning more to store-brand goods to tackle rampant food inflation, a trend that favors Aldi, which stocks fewer big brands than competitors. The grocer has served more than 1.1 million new customers over the past 12 months, said Hurley.
“We’ve seen customers switch their shopping” to Aldi, he said. “Existing customers are consolidating their spend with us and treating us as a first-stop shop.”
The grocer is growing sales at the fastest pace among supermarkets, seeing an increase of 21% in August from a year earlier, according to Kantar data. Sales at fellow discounter Lidl rose by almost 20% in the same period, while revenue at higher-end rivals Waitrose and Co-op rose by 4.4% and 3.4% respectively.
Competitors are watching Aldi’s rise closely. Both Tesco Plc and J Sainsbury Plc have pledged to match Aldi’s prices on hundreds of goods, while grocers are increasingly doing away with in-store food counters and delis in favor of the discounters’ simpler approach.
More Reductions
Food inflation has begun to ease in the UK, though remains at a high level, with the Office for National Statistics reporting a rate of 14.9% in July. Supermarkets are keen to demonstrate they are cutting prices where possible.
“I’m quite optimistic that between now and Christmas there will be more price reductions in our stores,” said Hurley. “When it comes to the longer-term picture on inflation it’s definitely more difficult to read. There are a lot of influences on the grocery sector.”
This year, Aldi will open 20 stores as part of its existing £1.3 billion ($1.6 billion) expansion plan. The new one opening Thursday in Woking, Surrey, is one of more than 150 that Aldi has in the South East, as it seeks to attract customers in the affluent region.
(Updates with CEO comments throughout)