Aldi boss Giles Hurley units sights on toppling Asda

Christmas preparations are in full swing at Aldi. At the discounter’s bustling new store in Daventry, Northamptonshire, shoppers are filling their trolleys with boxes of chocolate and bottles of Prosecco.

Before wriggling into a refrigerator to highlight some smoked salmon, UK boss Giles Hurley tells me that the grocer expects to sell 46 million pigs in blankets and 49 million mince pies during the festive season.

‘And Christmas wouldn’t be Christmas without the full array of crisps,’ the 50-year-old says as we meander together through the shop’s aisles. ‘We are a crispy nation.’

As in previous years, the battle to win pride of place at the Christmas Day dinner table is being fought on price.

Aldi, which boasts of being Britain’s cheapest supermarket, is selling a kilo of carrots for just 5p. This is to the chagrin of some farmers on social media, although Aldi says that it ‘fully funds all Christmas vegetable price cuts and these do not affect how much it pays growers or suppliers’.

However, Aldi is also involved in a fight for innovation. Gingerbread mulled wine and Wagyu beef are among some of the trendy options set to do well this year.

Aldi expects to have sold more non-alcoholic options in December than it will in January – reflecting that, for many, sensible drinking is now a way of life, not just for Dry January.

Hurley, who joined the no-frills grocer in 2000, has seen Aldi turn itself from ‘probably quite a quirky discount retailer’ to the fourth-largest food retailer.

And it is set to overtake third-placed Asda to sit in the top three with market leader Tesco and Sainsbury’s any time soon.

Looking back 25 years, Hurley remembers the business mostly sold packets and tins of products.

‘We didn’t stock garlic, for example,’ he recalls.

As we speak, the aftershock of the Budget is still reverberating through high streets up and down the country.

Hopes that the Chancellor’s business rates reforms would help to ease cost pressures were dashed for many retailers.

Small shops have been especially hard hit, but Hurley says big firms also didn’t get the Christmas present they were hoping for.

The business rates bombshell comes as British retailers face another onslaught of higher costs – including packaging taxes and higher wages – next year.

Hurley says a ‘full-scale review’ should be launched, with the opportunity for retailers to feed in their thoughts in a consultation.

‘I don’t think what we saw was the level of reform or change that the industry would have liked to have seen,’ he says.

‘There should be a level playing field for the industry. We do want to see more investment in British retail in high streets.

‘We know that that’s fundamentally important to the economy, and having a business rates landscape which supports that is definitely a positive, or would definitely be a positive.’

Despite all the gloom, Hurley is undeterred. Aldi plans to invest £1.6 billion over two years, opening 80 stores to add to its existing 1,060.

‘We’re very much in a growth phase, we want to continue to invest in the country,’ he says.

‘We’re also staying laser-focused on what we do best – focusing on price and delivering that discount for our customers, and ensuring that, on every basket, every time they come shopping, they get certainty that they’re going to get those lowest prices.’

Hurley is cautious about when Aldi, which is owned by Germany’s Albrecht family, will overtake Asda, which has struggled under its private equity masters.

‘It’s difficult to crystal-ball gaze,’ he says. ‘I learned during the pandemic to be careful of doing that, as things change very quickly.’ However, he adds: ‘No one has had, or does have, our ambition and will to grow.’

The business was set up by brothers Theo and Karl Albrecht in 1946 when they returned from prisoner of war camps and took over their family’s grocery store.

They quickly expanded under the name Albrecht-Diskont – shortened to Aldi – using fierce cost savings to keep prices low in post-war austerity. The stores did not even advertise, as that would cost money.

In 1971, the frugal brothers’ wealth led to Theo being kidnapped by a burglar, ‘Diamond’ Paul Kron and his crooked lawyer, Heinz Joachim Ollenburg, who had large gambling debts.

They kept Theo prisoner in a cupboard in Dusseldorf for 17 days, demanding a £1.5 million ransom. The cash, paid from the Albrecht family coffers, was dropped off at a rendezvous point, but the kidnappers were arrested shortly afterwards.

Only half of the money was retrieved. Theo later tried – unsuccessfully – to have the money written off by the taxman as a business expense.

Today, Aldi’s growth has plateaued. The most recent figures show it holds a 10.5 per cent market share – the same as a year ago.

Hurley says: ‘Our story is about growth and there are always ebbs and flows, but overall it’s growth.

‘I envisage that will continue as we bring our offer to more and more people in more places. When it comes to food and drink sales, we’re comfortably number three, and when it comes to volume in many areas we’re number two.’ Analysts say price-matching by rivals on everyday items like fruit and veg has blunted Aldi’s edge.

The discounter is also seeing some cannibalisation of customers when another Aldi store is opened in the same town.

Hurley admits planning restrictions make opening new stores a slog and should be made ‘simpler and less bureaucratic’.

It used to take about 12 weeks to open a new shop – but now it can take up to two years.

‘Clearly that’s investment being denied to British towns and cities,’ says Hurley. ‘We know investment is needed. It creates jobs, it creates choice for customers.’

The real battle for growth is happening 80 miles south of Daventry in London and the home counties, where Aldi wants to grow.

Hurley says he receives letters from customers every day asking for a new store near them.

Is this because stubborn inflation is increasingly squeezing Britain’s middle classes? Maybe, but Hurley muses: ‘I don’t think saving money has ever gone out of fashion in Britain.’

As for supporting British farmers, Hurley has previously warned that inheritance tax changes will endanger food prices and make Britain more reliant on imports.

However, he adds: ‘We’re also very focused on investing in long-term supply agreements to give our farmers and suppliers the confidence to invest.

‘And I think that’s more important now than ever before.’