aldi cuts prices as rivals match to stay competitive

Aldi has reported that the price of its goods has decreased compared to last year, despite ongoing grocery inflation. The discount supermarket has faced increased competition from larger chains like Tesco and Sainsbury's, which have implemented price-matching strategies to attract customers. As a result, Aldi's sales growth has slowed to just 0.5% this year, a significant drop from the 16% growth experienced in 2023. The company has invested nearly £100 million in over 300 price cuts on various products to maintain its competitive edge. Giles Hurley, Aldi's UK and Ireland CEO, highlighted that Aldi is the only UK supermarket not raising prices on an overall basket of goods, according to Kantar data. The retailer aims to be the cheapest option in the UK market and is close to surpassing Asda in sales, positioning itself as the third-largest grocer. Despite the current slowdown, Aldi's profits more than doubled last year, reaching nearly £537 million, as it rebounded from the pandemic. Aldi is also adapting to changing consumer behavior, with inflation easing on many commodities. Some customers are opting to trade up to higher-priced items, leading Aldi to expand its premium Specially Selected range, which constituted about half of its Christmas offerings. The supermarket plans to invest £800 million in the UK market this year, including the opening of 23 new stores and a significant partnership with AC Goatham & Son to establish an orchard for fruit production. Overall, Aldi's strategy focuses on maintaining low prices while adapting to market trends and consumer preferences. The company continues to prioritize customer certainty in pricing, as it navigates a competitive landscape marked by price-matching initiatives from larger rivals.