We bring you the key insights from a recent Reuters interview with Aldi UK CEO, Matthew Barnes, in which he discusses the discounter's continuing positive performance.
Not suffering from retailers fighting back
Matthew Barnes is not convinced that the supermarkets are closing the price gap with Aldi. The discount head claims that internal data shows the price gap is widening. According to Barnes an average basket of groceries hasn't dropped below 20%, with some supermarkets up to 35% more expensive, and in his view this is set to continue.
"This year has started with a bang"
Barnes has shared that 2017 has got off to a successful start as customers vote with their feet: "We are growing fantastically. February started extremely strongly." According to a recent ShopperVista food discount report, almost one in five (19%) of Aldi shoppers claim that they will use food discounters more for their main shop over the next six months.
While Aldi does not report like-for-like sales figures, Barnes has disclosed that Aldi's like-for-like sales are 'very positive', and that they will remain so this year. Aldi however does not use this internally as a performance indicator as the discounter deliberately opens new stores to ease the pressure and take away sales from existing sites that might struggle to cope with high footfall. "There is such a thing as good cannibalisation", says Barnes.
Better placed to cope with inflation
Barnes has addressed the fact that Aldi is not immune to price inflation, however it will remain committed to being the lowest priced grocery in the UK market. Barnes seems confident that Aldi is better placed to to cope with inflation due to its high level of British sourcing, from which 77% of the discounter's sales come from, and therefore raised import costs become less of an trading issue. In addition, Aldi continues to lever the support of its parent company Aldi Süd with financial support.
Look out for our upcoming Aldi strategic initiatives report...
|Priya Chandarana is a Retail Analyst at IGD, specialising in research on the growing discount channel. To learn more about how IGD's research can benefit your business further, please get in touch - [email protected]