As the Big Four supermarkets continue to struggle against the discounters, many are making the decision to cut back on large store openings as a means of expanding their convenience networks. However, it has emerged that discount brand Aldi is engaging in the completely opposite strategy, with executives revealing it intends to almost double its existing UK store portfolio by 2022.
At present, Aldi operates around 500 stores in the UK and intends to increase this total by 54 during the current financial year. However, this expansion is due to build in momentum as early as next year, with the brand confirming its intent to open 60 to 65 new stores during the 2015 financial year during a visit by Prime Minister David Cameron to its UK headquarters earlier this week.
Aldi initially sparked rumours of a mass store opening programme, which will see the number of branded stores in the UK climb to over 1,000, when it announced a £600 million investment into long term growth back in September. It also confirmed an intention to create 35,000 new jobs in the UK as part of this expansion, with positions ranging from full-time managerial to part-time assistant roles.
In a statement, the firm pledged to commit to a sustainable apprenticeship programme as part of the large scale employment drive.
It said; “This [investment] includes plans to create at least one apprenticeship position per store, per year, which would see the employment of between 600 and 1,000 apprentices each year as Aldi strives towards 1,000 stores.
“Apprentice training and development will be supported by a new Apprenticeship Academy located at Aldi’s offices and distribution centre in Bolton, which is due to open in March 2015.”
Although Aldi and direct rival Lidl are certainly putting pressure upon the Big Four at present, they still remain relatively far behind in terms of market share. Aldi currently controls 4.8 per cent of the UK grocery market according to data from Kantar Worldpanel which, although far less than Tesco’s current controlling share, is beginning to catch up to upmarket brand Waitrose’s 5.1 per cent portion.
However, executives at the chain believe that upping the pace of its store opening programme will allow Aldi to gradually eat into the Big Four’s market share even as its larger rivals invest heavily into expanding their convenience networks. This is backed up by the brand’s consistently strong sales growth and the fact that its market share in the UK has steadily risen since early 2013.
David Cameron welcomed Aldi’s announcement, stating that the chain’s commitment to expanding its UK network is a testament to the country’s resilient economy.
He continued; “Aldi’s plans to create tens of thousands more jobs across the country are a vote of confidence in our long term economic plan to back business, create more jobs and secure a brighter future for Britain.
“This news will mean more financial security for hardworking families and opportunities for young people who want to get on in life.”
Do you think Aldi’s store opening targets are achievable, or are they entirely dependent upon the pace of sales growth continuing at the chain?
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