Aldi boss warns higher business costs could ‘find their way’ into supermarkets

The boss of Aldi has urged the Government to avoid hiking costs for retailers in the autumn Budget because of the risk they can “find their way” onto supermarket shelves.

Giles Hurley, the chain’s UK and Ireland chief executive, said inflationary pressures affecting shoppers were “persistent and urgent”.

Looking ahead to the Budget, he said the retail industry “has been really clear that we would strongly advise that any policies and measures that are adopted don’t add costs to business operations because of the risk that they can find their way through to the food sector”.

He added that the “ripple effect” could affect consumer confidence.

It comes after many large retailers have blamed rising costs – mainly employer national insurance contributions and new packaging taxes – for helping worsen food inflation in the UK.

Shopping habits have changed as a result, with people more keen to hunt down lower prices, Mr Hurley said.

This had made Aldi “more popular than ever”, with shoppers increasingly switching to make it their regular supermarket.

The chief executive also pointed to more people buying into supermarket premium ranges – with sales of Aldi’s Specially Selected products growing by 14.5% over 2024, compared with 2023.

“It’s a trend at the moment where customers are seeking to treat themselves at home, rather than going out,” Mr Hurley said.

“If you asked customers across the length and breadth of the country, I think they would say that inflationary pressures are persistent and they’re urgent.

“I very much see that we can be part of the solution to that challenge, which is staying laser-focused on delivering the lowest prices in the market – hence why we’ve invested £300m this year so far on reducing prices, seeking to offset inflationary pressures.”

Aldi’s total sales increased to £18.1bn in the UK and Ireland over 2024, up from £17.9bn in 2023, thanks to it opening a swathe of new shops during the year.

On a like-for-like basis, which strips out the impact of new store openings, sales were down in 2024.

Mr Hurley said that partly reflected the grocer lowering its prices during the year.

Furthermore, operating profits fell by about a fifth to £435.5m from £552.9m the year earlier.

The company said this was largely because of its investment in lower prices for customers, building and refurbishing shops, and raising pay for staff.

Aldi announced a further £1.6bn of investment to accelerate its UK supermarket expansion – with 80 openings in the pipeline over the next two years.

The chain, which currently has 1,060 stores, has previously said it is targeting 1,500 locations across the UK.