Aldi makes price pledge for 2022 as surging inflation squeezes shoppers’ budgets

Aldi says it enjoyed a record Christmas with sales boosted by “half a million new shoppers in December” as the wider grocery sector gears up for a tougher year as household budgets are squeezed by surging inflation.

The UK’s fifth-largest supermarket chain said sales in December rose by 0.4% compared to the previous year, when grocery spending was higher than usual due to the national lockdown and temporary closure of bars and restaurants.

It claimed the return of its character Kevin the Carrot in festive Christmas TV commercials helped it win customers at the expense of rivals but, as is usual for Aldi, it offered no like-for-like data on how existing stores had performed based on the same period last year.

Without it, analysts can only speculate on whether the growth came from new store openings.

Image: Aldi said consumers have been touched by its Kevin the Carrot character

Mindful of the inflation problem, Aldi said it committed “to offering shoppers the lowest grocery prices throughout 2022”.

Advertisement

The company released its update after industry data last week showed that Aldi and its main discount rival Lidl had enjoyed the strongest rates of sales growth over the festive season.

Kantar Worldpanel said that while sales at both were more than 16% higher over the 12 weeks to 31 December, Tesco had won the race for greater spoils among the ‘big four’ players which include Sainsbury’s, Morrisons and Asda.

More from Business

Rolls-Royce Motor Cars immune from global chip shortage after record year for sales

Wilko: Hundreds of jobs at risk as home and garden retailer plans to shut stores with expensive leases

Cost of living: Labour unveils plan to cut energy bills by hundreds of pounds a year

The rush to the discounters at Christmas piles pressure on the more established chains as shoppers face a squeeze on their budgets due to surging inflation.

Kantar reported that grocery price inflation was 3.7% over the festive season.

The wider headline rate, the consumer prices index, is already at its highest level for a decade – led mostly higher by rising wholesale gas costs within energy bills.

They are tipped to rise more dramatically in April when the next adjustment to the price cap is introduced.

The industry has warned that, without government intervention, the average annual bill for heating homes could hit £2,000.

Please use Chrome browser for a more accessible video player

2:37

Labour calls for energy windfall tax

It currently stands at £1,277.

Since the financial crisis, supermarket chains have largely been locked in a price war in a bid to protect their market shares.

Aldi, the Kantar figures showed, was just over two percentage points off Morrisons.

It is continuing its rapid expansion, revealing in September that it planned to create 2,000 jobs this year and grow its store base by 100.

It will give Aldi more than 1,000 UK stores when completed.

Giles Hurley, Aldi UK’s chief executive, said: “As we look ahead, the top priority for most families this year will be managing their household budgets in the face of rising living costs.

“As the cheapest supermarket in Britain, Aldi will always offer the lowest prices for groceries, no matter what, and continue to support our British farmers and producers.”