Discount supermarket chain Aldi has announced that its operating profits fell by 26% to £197.9m last year, as the company invested heavily in the face of fierce competition.
Aldi – which is headquartered in Essen, Germany – has also announced plans to open new, smaller stores throughout the UK.
Giles Hurley, the supermarket’s boss, said Aldi would invest £1bn in opening roughly one new store every week for the next two years. The expansion would create 5,000 new jobs, the company said.
Blaming falling profits on discounts for customers, Aldi also said that more expensive infrastructure investment had eroded its margins.
Mr Hurley said Aldi was “committed” to price cuts for customers regardless of external pressures such as Brexit.
“We are somewhat protected from Brexit pressures because of our strong network of British suppliers,” Mr Hurley said.
He added: “Around 75% of our products comes from British based suppliers and manufacturers.”
Despite the slip in profits, sales for the supermarket chain continued to soar.
Last year, the company welcomed more than 800,000 new customers, contributing to an additional £1.1bn in sales, up 11% when compared to the previous 12 months.
Aldi is the UK’s fifth biggest supermarket. It currently operates 840 stores across the country, with aims to have 1,200 sites by 2025.
The company also confirmed plans to move ahead with the rollout of its local stores, the first of which opened in Balham earlier this year.
The trial had “exceeded expectations”, Mr Hurley said. As a result, Aldi was eyeing 50 new local stores across London, and assessing their viability outside the capital.