Aldi’s UK Property Expansion 'To Include Replacement Stores': Analyst

By Steve Wynne-Jones
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Aldi’s UK Property Expansion 'To Include Replacement Stores': Analyst

Analysts Bernstein Research have examined whether Aldi’s growth plans tally with its predictions of a run-down in the hard discounter property pipeline.

Aldi’s UK operation recently announced that it plans to refurbish a total of 380 stores across the UK by 2021, to add to 200 stores it has already renovated.

In addition, the group plans to expand its store estate, with 70 store openings in 2018, and a further 130 between 2019 and 2020.

Property Run-Down?

“Our property­ pipeline work does suggest that (1) hard discounters are running down the pipeline (i.e. less planning applications) but indeed still have ~2 to 3 years of openings to go before the pipeline runs dry and (2) a lower rate of 'new' store opening in the first half of this year in the UK,” Bruno Monteyne of Bernstein Research said in a briefing note.

“The announcement of 70 stores in 2018 seems materially higher. This could possibly be the case if (1) Aldi is also counting a new store, nearby an older store which is then mothballed, as a new store (we would classify that as a replacement store, as its impact on competitors is very different) or (2) if Ireland stores are included in that number as well.”


Bernstein suggests that around 20 of the 70 ‘new’ stores planned are therefore replacement stores.

Sales Performance

Aldi operates more than 775 stores across the UK and Ireland.

The discounter posted sales in its UK and Ireland division of £10.2 billion in 2017, which was up 16.4% on the same period last year.

Aldi posted an operating margin increase of 20 basis points to 2.6%, its first increase in operating margin in four years.

© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.

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