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Aldi UK's Trading Accelerates as Shoppers Seek Savings

  • 2021 operating profit tumbles 79%
  • 2021 sales up 0.9%
  • Sales in last three months up 18.7% - industry data
  • CEO says Aldi "comes into its own" in crisis

LONDON, Sept 26 (Reuters) - The British arm of German discounter Aldi reported a 79% slump in 2021 operating profit but said trading had accelerated over the past six months as pandemic restrictions were lifted and shoppers sought savings to tide over a cost of living crisis.

Privately owned Aldi (ALDIEI.UL), which earlier this month overtook Morrisons to become Britain's fourth-biggest supermarket group, said operating profit fell to 60.2 million pounds ($63.8 million) in 2021 from 287.7 million pounds in 2020.

The profit fall was blamed on investment to keep prices low, higher staff costs and COVID-19 related expenses. Sales rose 0.9% to 13.645 billion pounds.

"Preserving our price discount and rewarding our people will always be more important to us than short-term profit," said CEO Giles Hurley.

"Being privately owned means we can keep our promises even when times are tough."

Aldi and rival discounter Lidl were hurt during the pandemic by the lack of significant online businesses, but have drawn customers from traditional supermarkets as the cost of living crisis has forced them to seek savings.

The latest industry data shows Aldi's sales growth at 18.7% over the 12 weeks to Sept. 4 with market share at 9.3%, the highest in its 32-year history.

Hurley said the cost of living crisis is a time "when Aldi comes into its own".

"From our carefully selected range to our smaller format stores to our trademark efficiency, we can leverage our unique approach for the benefit of all of our customers," he said.

The discounters' performance has forced the traditional major players - market leader Tesco, Sainsbury's, Asda and Morrisons - to compete more aggressively. Tesco and Sainsbury's both have schemes that match Aldi prices on some products.

Aldi currently trades from 970 stores. It plans to open 16 more before the end of the year - part of a plan to invest 1.3 billion pounds. It said its expansion will create over 6,000 jobs this year.

($1 = 0.9433 pounds)

Reporting by James Davey; Editing by Jason Neely and Muralikumar Anantharaman

Source: Reuters

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