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Sancho Panza

Aldi Profits Up 65%,like For Like Sales Up 30%

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Telegraph 29/9/14

'Aldi reported that sales grew 35.7pc to £5.3bn in 2013, with like-for-like sales up 30pc, driving pre-tax profits up 65.2pc to £261m. The company said it paid £62.8m of corporation tax in the UK, a rate of 24pc.

Mr Barnes said Aldi had a “spectacular” year, but is growing even faster in 2014.

The rise of Aldi highlights the pressure on the “big four”, Tesco, Asda, Sainsbury’s and Morrisons. Sainsbury’s is expected to post a fall in like-for-like sales of roughly 3.5pc on Wednesday, while Tesco is reeling from a trio of profit warnings and the discovery of a £250m black hole in its accounts.

Mr Barnes, speaking before Tesco announced it had a shortfall in its accounts, said: “As the price war has begun, our sales, market share and growth have accelerated. Customers are listening to the number of times retailers comment on closing the gap on Aldi, I mean all that is serving to do is highlight that we are the target for price and the leader for price.

He added: “Customers have become so much more sceptical since the recession about the grocery market in terms of value, transparency, and special offers.

“They have been bamboozled by a price reducing from a very high level to a low level, and yet that low level is still more expensive than Aldi.

“I think that has enabled us to stand out as a bit of a shining light. You can call us a consumer champion in that respect. Customers have come to see Aldi as a business they can trust, potentially in a market where there is very much a lack of trust.”

Aldi said it is attracting one million more customers than a year ago. The average customer is also buying more items, with Aldi recording an average basket size of 16.9 items, ahead of 16.6 at Tesco but behind 18.8 at Asda. Despite this increase, the average amount spent at Aldi, £18.99, is still 22pc less than the £24.37 at Tesco.

Despite the “big four” committing hundreds of millions of pounds to lowering their prices, Aldi has pledged to maintain the gap between its prices and the traditional supermarkets.

This has involved its margins taking a hit in 2014, meaning profits are likely to grow at a slower pace this year. Aldi’s operating margin in the UK was 5.1pc in 2013, up from 4.4pc in 2012, but will fall this year.

Mr Heini said “We work efficiently and responsibly to reduce operational costs. Rather than use these savings to boost margins, we lower prices at the checkout.

“That [the latest price reductions] went straight off the bottom line. We are here to not lose the trust that we have built over the last four years. A lot of work goes into gaining that trust. Customers can come to us and know what they have to spend and know there won’t be a promotional offer undercutting us. We don’t want to jeopardise that trust by not maintaining the gap."'

Interesting that the main beneficiary of the recovery are the discount supermarkets.Also worth noting the subtle point he makes about the big four helping to get rid of the social stigma by mentioning the discounters so many times that they've legitimized it in the minds of middle class shoppers.

Knife catching today is at £1.88 down 3%

https://uk.finance.yahoo.com/q?s=TSCO.L

Edit to add:Tesco putting 10 store openings on hold.

The Grocer 24/9/14

Guardian 18/7/14

'Tesco unlocks its landbank to build 4,000 new homes


Tesco is to build 4,000 new homes in an attempt to make use of its vast undeveloped landbank with a £1bn construction programme.

The plan, announced weeks after the Guardian revealed that Tesco is hoarding land that could support 15,000 homes, is the biggest housebuilding project ever announced by the supermarket.'

Edited by Sancho Panza

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What's particularly annoying about ALDI and LIDL is that they're privately held. No opportunity to invest in them and share in their success.

I did look. Round about five years ago :(

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Aldi is always uncomfortably busy for me - prefer Lidl TBH.

Plus they have a shite policy of not allowing baskets past the checkouts yet they have shelves to sort your shopping BEYOND the checkout (this reminds me to have an official moan about this very thing) - Lidl have no such nonsense!

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Guardian 18/7/14

'Tesco unlocks its landbank to build 4,000 new homes

Tesco is to build 4,000 new homes in an attempt to make use of its vast undeveloped landbank with a £1bn construction programme.

The plan, announced weeks after the Guardian revealed that Tesco is hoarding land that could support 15,000 homes, is the biggest housebuilding project ever announced by the supermarket.'

Now if only we could get Tesco to get into the property rental game, that might shake things up a bit price wise, introduce a bit of real free market economics into the BTL sector and drive rental prices down (and hopefully free-up some housing stock as well). I can just see it Tesco Value Studio Flat, Tesco own brand 1-bed flat, Tesco Finest 2-bed luxury flat.

What's particularly annoying about ALDI and LIDL is that they're privately held. No opportunity to invest in them and share in their success.

I did look. Round about five years ago :(

I suspect that is part of the secret of their success.

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What's particularly annoying about ALDI and LIDL is that they're privately held. No opportunity to invest in them and share in their success.

I did look. Round about five years ago :(

And this is the primary reason they are cheaper than the publicly held supermarkets. They are not dishing out loadsamoney to greedy shareholders, bankers, investors and SPIVs.

From my experience, in a public owned company you simply just do not get the efficiency [lack of waste labour and goods] that you do in public companies. The purse strings are held much tighter.

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Now if only we could get Tesco to get into the property rental game, that might shake things up a bit price wise, introduce a bit of real free market economics into the BTL sector and drive rental prices down (and hopefully free-up some housing stock as well). I can just see it Tesco Value Studio Flat, Tesco own brand 1-bed flat, Tesco Finest 2-bed luxury flat.

I suspect that is part of the secret of their success.

If Tesco could lower the cost of housing then they would be net beneficiaries - not to forget Tesco also offer Mortgages, so they could give grocery discount to new Tesco mortgage & homeowners.

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What's particularly annoying about ALDI and LIDL is that they're privately held. No opportunity to invest in them and share in their success.

I did look. Round about five years ago :(

Fantastic. No doubt if they were public, the price gouging would commence.

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Aldi is always uncomfortably busy for me - prefer Lidl TBH.

Plus they have a shite policy of not allowing baskets past the checkouts yet they have shelves to sort your shopping BEYOND the checkout (this reminds me to have an official moan about this very thing) - Lidl have no such nonsense!

I don`t want to start paying for basket thefts thank you. Leave things as they are. Aldi`s business model works. End of.

The shelves are there to put your groceries into bags from the trollies, after going through checkout. So cutting down waiting time, and you whiz through the payment process itself. Although there are always one or two numpties who pedantically place their stuff into bags at the tiny shelf next to the till and so hold up everyone behind them. All these seemingly minor details have been thought out very well by Aldi.

Edited by GinAndPlatonic

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Deutscheland uber alles.

They're doing what they (and Japan & Britsh management) did to the car industry.

Once they've obliterated the UK supermarket industry they'll step in and buy up the choice cuts.

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I don`t want to start paying for basket thefts thank you. Leave things as they are. Aldi`s business model works. End of.

The shelves are there to put your groceries into bags from the trollies, after going through checkout. So cutting down waiting time, and you whiz through the payment process itself. Although there are always one or two numpties who pedantically place their stuff into bags at the tiny shelf next to the till and so hold up everyone behind them. All these seemingly minor details have been thought out very well by Aldi.

Its a big selling point for me. Even if there is a que of 5 or 6 people and loads of goods on the belt you know it moves very quickly.

InTesMorrberries the same q would take bloody ages to clear. Then the old dear in front would be having a chat with the checkout operator about her cat or other.

The Lidl/Aldi ones just tell the old dears to 'do one'.

Edited by geezer466

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Deutscheland uber alles.

They're doing what they (and Japan & Britsh management) did to the car industry.

Once they've obliterated the UK supermarket industry they'll step in and buy up the choice cuts.

Yes by making things more efficient and work better. I demand my birth right as a Brit to have a made on a Friday Austin Allegro with a square steering wheel in $hit brown and who knows how many faults!

My family have been in manufacturing for generations, and both my mum and dad can recall the days of management in the 60/70s talking and laughing about Jap Cr@p, seemingly oblivious to the fact that they were actually churning out Brit $hit.

In all fairness Tesco et al. have spotted the threat, trouble is can they make themselves the lean and mean selling machines that Aldi and Lidl are or will they mess it up? Also will the government want them to become leaner and hence no longer provide 1,000's of minimum wage jobs to keep the unemployment figures looking good.

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.....loads of waitrose shoppers also shop in L&A....they buy their basics of excellent quality and value there,stocking up.... then buy certain specialist foods that they may not need every day but know to be of quality not always of price but worth it there.....or use the local butcher, or other specialist stores in and around town.....no longer do we do the one stop shop, all things to all people....we shop around for best quality, service and value....different things from different places. :)

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And this is the primary reason they are cheaper than the publicly held supermarkets. They are not dishing out loadsamoney to greedy shareholders, bankers, investors and SPIVs.

From my experience, in a public owned company you simply just do not get the efficiency [lack of waste labour and goods] that you do in public companies. The purse strings are held much tighter.

Interesting observation.

Privately owned businesses still have shareholders and shares - it's just that they're not tradeable in the way that a publicly listed company is.

Is the difference that private companies have fewer and more active shareholders? Or that the scrutiny and transparency demanded for listing are actually detrimental to shareholder value? Quarterly statements to the city, for example, forcing a short termism that is detrimental to the business and not even required by the beneficial share owners (ie the future pensioners who don't care about anything before 2037 or whatever their golden date is)?

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Interesting observation.

Privately owned businesses still have shareholders and shares - it's just that they're not tradeable in the way that a publicly listed company is.

Is the difference that private companies have fewer and more active shareholders? Or that the scrutiny and transparency demanded for listing are actually detrimental to shareholder value? Quarterly statements to the city, for example, forcing a short termism that is detrimental to the business and not even required by the beneficial share owners (ie the future pensioners who don't care about anything before 2037 or whatever their golden date is)?

In the case of a troubled business, private equity is often better-placed than the stockmarket to take a long view.

But Tesco was a rising star for more or less quarter of a century, since it turned itself from cheap&nasty to the biggest and best in the 1980s. Not entirely short term! And longer-established retailers like Sainsburys and M&S have seen their fortunes rise and fall more than once ...

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.....loads of waitrose shoppers also shop in L&A....they buy their basics of excellent quality and value there,stocking up.... then buy certain specialist foods that they may not need every day but know to be of quality not always of price but worth it there.....or use the local butcher, or other specialist stores in and around town.....no longer do we do the one stop shop, all things to all people....we shop around for best quality, service and value....different things from different places. :)

This is exactly what is do, lidls is preferred as they have instore bakery. Buy all the main items where is doesnt matter like soap powder weetabix etc then buy nice cuts of beef form butcher and fruit n veg from market. Still cheaper than any major supermarket and the quality is higher just involves a bit of running around.

Farmfoods is also good for lots of cheap bargains too. They have lots of brands at knockdown prices.

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The strength of Aldi and Lidl is simplicity.

For example, if you were looking for dishwasher tablets in Tesco, prepare to be rinsed (see what I did there)

Aldi and Lidl stock precisely 1 variety at a good price that works well - same price every time you need it - no yo-yo pricing.

This is exactly what people want, stable product and prices, little variety to confuse them.

Tesco have exactly the wrong business model, they should leave the huge array of fancy products to specialist shops such as off-licenses, cheese mongers etc and concentrate on supplying the basics as a good price.

People do not want a vast array of products at different prices that perform the same basic function (milk, washing powder, dish washer tablets, bin bags etc..)

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For example, if you were looking for dishwasher tablets in Tesco, prepare to be rinsed (see what I did there)

Aldi and Lidl stock precisely 1 variety at a good price that works well - same price every time you need it - no yo-yo pricing.

Hate to be a Lidl nerd but they actually stock 2 types. The 3-1 fancy multicoloured ones and the all the same colour basic ones. Being a HPC aficionado I of course only buy the basic ones.

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The strength of Aldi and Lidl is simplicity.

For example, if you were looking for dishwasher tablets in Tesco, prepare to be rinsed (see what I did there)

Aldi and Lidl stock precisely 1 variety at a good price that works well - same price every time you need it - no yo-yo pricing.

This is exactly what people want, stable product and prices, little variety to confuse them.

Tesco have exactly the wrong business model, they should leave the huge array of fancy products to specialist shops such as off-licenses, cheese mongers etc and concentrate on supplying the basics as a good price.

People do not want a vast array of products at different prices that perform the same basic function (milk, washing powder, dish washer tablets, bin bags etc..)

This is one of the reasons we prefer Aldi. It's quicker to walk round if you don't have to walk past 20 versions of the same product. It's mentally easier to shop when you aren't having to make a choice every 10 seconds (or, in the case of the skinflinterati, fend off distractions and hunt down the (cheap) item you'd come to buy). And the act of shopping doesn't rub in your face the decadence of modern life; 50 types of gastronomic dog food, squirty cheese, and a whole host of other products of marketing.

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This is exactly what is do, lidls is preferred as they have instore bakery. Buy all the main items where is doesnt matter like soap powder weetabix etc then buy nice cuts of beef form butcher and fruit n veg from market. Still cheaper than any major supermarket and the quality is higher just involves a bit of running around.

Farmfoods is also good for lots of cheap bargains too. They have lots of brands at knockdown prices.

If passing and have time l will pop into Farmfoods they are really rather good l have to say.

What l like especially is the discount stores don't sell high cost (unless on special promotion)branded foods....higher cost but no better a product, when we buy branded we are paying for advertisements and marketing and packaging...l would rather pay less for more, the same and better.

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What's particularly annoying about ALDI and LIDL is that they're privately held. No opportunity to invest in them and share in their success.

I did look. Round about five years ago :(

which is why...........you can't

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Aldi is always uncomfortably busy for me - prefer Lidl TBH.

Plus they have a shite policy of not allowing baskets past the checkouts yet they have shelves to sort your shopping BEYOND the checkout (this reminds me to have an official moan about this very thing) - Lidl have no such nonsense!

Not true for every Aldi that I've been in. What happens if you repack your items into the basket? Do they waste time stopping you from doing that?

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