At a time when many grocers in the UK are in crisis mode, seeking to overcome labor and supply chain shortages to keep operating, Aldi is taking a different approach. The German discount grocery giant is investing Â£ 1.3bn (around $ 1.8bn) to expand its presence in the UK, gaining shares of the country’s largest grocers.
Part of the goal of this push is to retain brick-and-mortar grocery shoppers amid the challenges of e-commerce players.
âAround 88% of UK consumers want to shop in storesâ¦ There is no doubt that bricks and mortar are at the center of our business,â said Giles Hurley, CEO of Aldi UK, in a Reuters report. .
This expansion plan includes the opening of 100 new stores and the creation of 2,000 new jobs, at a time when the industry’s grocers are grappling with labor shortages.
The announcements come after a good year in the UK and Ireland for Aldi, with the region’s grocer sales up 10.2% in 2020, despite a slight drop in operating income.
Responding to widespread supply chain shortages that made headlines, Hurley played down the concerns.
“It’s hard to believe that anyone can be immune to the supply issues we face, but our business is quite unique and ultimately well positioned to deal with these issues due to our small number of suppliers and our smaller range, âHurley said, according to PA Media.
At Hurley’s Point, online grocery shopping is on the decline in the UK. Recent research from Kantar shows that the average online shopping cart size is down by about 17 pounds (about $ 23) from its pandemic peak, and that online grocery shopping’s share in the Total industry, 12%, hit its lowest point since May 2020.
As grocers in many countries grapple with tough working conditions, as headwinds intensified during the pandemic, accelerating trends that were already threatening the industry, the UK has been hit particularly hard. Brexit red tape has reduced the labor pool and the shortage of truck drivers has made it difficult for grocers to stay fully stocked. Now, grocers are warning there could be a significant shortage of Christmas favorites during the 2021 holiday season.
Read more: Grocery store: UK labor shortage jeopardizes Christmas dinner
Even before the pandemic, the UK grocery market was tricky for many in the industry. In February 2020, after two decades of owning supermarket and supercentre chain Asda, the UK’s third-largest grocer, Walmart announced that it was looking for a new investor to take over. In February 2021, the company closed the sale of its majority stake to private equity firm TDR Capital and convenience store tycoons Zuber and Mohsin Issa.
See also: Walmart to sell UK supermarket chain Asda for $ 7.9 billion