January 6, 2020 / 7:19 AM / 23 days ago

Aldi UK's Christmas sales growth fueled by alcohol and premium ranges

LONDON (Reuters) - Aldi UK, the British arm of the German discount supermarket, said on Monday total sales rose 7.9% year-on-year in the four weeks to Dec. 24, driven by strong demand for beers, wines and spirits and its range of premium products.

A shopper leaves an Aldi store in London, Britain February 15, 2018. REUTERS/Peter Summers

The firm, the UK’s fifth biggest grocery chain with a market share of 8%, also signaled it would keep up pressure on its larger rivals, saying it was on track to achieve its long-term target of 1,200 stores by 2025 from 874 currently.

Aldi UK trails market leader Tesco (TSCO.L), Sainsbury’s (SBRY.L), Asda (WMT.N) and Morrisons (MRW.L), but along with fellow German-owned discounter Lidl has been winning market share from the big four with an aggressive store opening program.

The firm said sales during the four weeks to Dec. 24 topped 1 billion pounds ($1.31 billion) for the first time. However, while sales growth of 7.9% is robust compared to rivals, it lags the 11% growth Aldi reported for the whole of 2018.

Without giving a figure, Aldi said sales measured on a like-for-like basis were positive.

It highlighted a 9.2% increase in total sales in the beers, wine and spirits category and growth of almost 8% in its premium “Specially Selected” and fresh British meat ranges.

“More customers than ever before shopped with us this Christmas,” said CEO Giles Hurley.

“Although we saw strong growth across all key categories, sales of our premium Specially Selected range surpassed expectations,” he said.

Aldi’s stated focus is on sales growth, new stores and customer numbers rather than short term profits. In 2018, while sales rose 11%, operating profit fell 26%.

Britain’s food retailing sector has been transformed in the last decade by the march of Aldi and Lidl which has driven down the returns of the big four players.

They have fought back by trying to narrow the price gap with the discounters, improve customer service and chase greater purchasing power.

Morrisons will update on its Christmas trading on Tuesday, followed by Sainsbury’s on Wednesday and Tesco on Thursday. Industry data from market researcher Kantar will also be published on Tuesday.

Reporting by James Davey; editing by Sarah Young, Kirsten Donovan

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