Aldi generates £8.5bn for UK economy - Supply Management
The report said Aldi's contribution was a direct result of the company's source local policy © Aldi
The report said Aldi's contribution was a direct result of the company's source local policy © Aldi

Aldi generates £8.5bn for UK economy

25 September 2017

Aldi is adding significant value to the UK economy by sourcing from British businesses and investing in the country, according to the Centre for Economics and Business Research (Cebr).

Cebr’s Economic Impact Report found the discount retailer contributed to the generation of over £8.5bn in GDP to the UK economy in 2016, through job creation, spending with British-based businesses, tax contributions and capital investment.

Cebr also expects the contribution to grow to £11.5bn by 2022 as Aldi reaches its target of 1,000 UK stores. 

The independent report attributed Aldi's contribution as a direct result of the company sourcing products manufactured or grown in Britain whenever possible, generating 77% of its sales from products sourced via more than 1,000 UK suppliers.

Oliver Hogan, director of Cebr, said Aldi's contribution to the UK economy was impressive but logical given the retailer's extensive links with the wider domestic economy.

“This is driven by the efficiency and flexibility of Aldi’s business model, which is set to continue to meet the cost and competitive pressures of the grocery market,” he said. 

“Ultimately, this will help the supermarket to sustain growth and drive prosperity for the wider economy as Aldi’s supply chain is so heavily British-based.”

Cebr’s report was highlighted as part of Aldi’s announcement that sales rose by 13.5% to £8.744bn in 2016, while operating profit fell by 17% to £211.4m, from £255.6m the year before.

Aldi said half of the fall in profit had been the result of keep prices or cutting them and the rest came from investing in new stores and distribution centres as it geared up for future growth.

Matthew Barnes, CEO of Aldi UK and Ireland said Cebr’s report showed the company’s commitment to Britain and local suppliers.  

“For the first time, this report demonstrates how the positive impact of Aldi’s low-priced, high-quality products stretches beyond our stores,” he said.

“Our approach to sourcing as local as possible means that shoppers are able to enjoy the best-value products, with the confidence that they’re supporting British companies and jobs.”

He added that last year, the company had supported 146,000 direct and indirect jobs across the UK, which is expected to rise to at least 205,000 by 2022. 

Between 2005 and 2016, the company invested £2.3bn in its UK portfolio, which now features 726 stores and nine regional distribution centres, according to company figures. 

Barnes said that the latest figures from consumer insights firm Kantar Worldpanel found that Aldi is currently the fifth-biggest supermarket in the UK, with 7% market share.

“We continue to invest in expanding our store network and our supply chain, as well as smart ways of working that reduce waste and drive efficiencies,” he said. 

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