Aldi is intensifying its price competition with established UK supermarket chains. The German discounter’s aggressive pricing strategy has prompted British rivals to introduce “Aldi Price Match” campaigns in an attempt to halt Aldi’s market expansion.
(Source: Christoph Meyer/dpa/dpa-bilder)
Record-breaking sales amid fierce competition
Aldi UK reported a record turnover of £17.9 billion (approximately €21.2 billion) in the past year, marking a 16% increase compared to 2022. Pre-tax profits soared from £152.6 million to £536.7 million. However, Aldi’s market share growth has slightly slowed in the current year, with experts attributing this to the “Aldi Price Match” initiatives introduced by traditional British supermarket chains like Tesco, Sainsbury’s, Asda, and Morrisons.
Giles Hurley, CEO of Aldi UK and Ireland, announced plans for further price reductions, expressing optimism about additional price cuts before Christmas. The company also intends to make new investments to maintain its competitive edge.
However, trade expert Stephan Rüschen questions the wisdom of British supermarkets using “Aldi Price Match” signage. He argues that this strategy inadvertently reinforces Aldi’s position as a price leader. Rüschen, a professor of food retail at the Baden-Württemberg Cooperative State University in Heilbronn, notes that while such explicit price matching isn’t seen in Germany, there is a de facto price focus on Aldi, with all retailers aligning their entry-level prices with Aldi’s, even for brand-name products like Nutella.
Aldi’s significance in the UK market
The UK has become the third most important market for Aldi globally, following Germany and the USA. The discounter now holds a 10% market share, making it the third-largest supermarket in the country. Its competitor Lidl is close behind with just over 8% market share.
As the price war continues, it remains to be seen how Aldi’s aggressive pricing and expansion strategies will shape the UK retail landscape in the long term. The competition’s response highlights the significant impact Aldi has had on the British grocery market, forcing established chains to adapt their pricing strategies to remain competitive.
