Aldi’s financial performance in 2015 receives blanket coverage in this morning’s papers. The discount supermarket chain unveiled record sales of £7.7bn and a planned £300m investment to refresh its UK stores, but it reported a drop in profits as the supermarket price war ate into its margin (The Financial Times). Operating profits slid 1.8% as a result of continued discounting, with prices cut on 30% of its products so far this year (The Telegraph). The Independent writes that Aldi is not immune from the effects of the price war it started. The Times reports that Aldi will keep cutting prices to keep its position as the cheapest grocer in Britain, even if that means it makes a loss, CEO Matthew Barnes promised yesterday. He said Aldi had made a “contract” with shoppers that it would not break. The Guardian takes a similar angle, writing that Barnes pledged to win price war after profits fell.
The Mail focuses on Aldi’s bid to outgun Waitrose with plans to spend £300m sprucing up its stores. “It’s going posh and wants a store on every High Street”, the headline reads. “Aldi is selling nine bottles of wine a second as it plans a £300million revamp to take on Waitrose. Following in the footsteps of German competitor Lidl, the low-cost supermarket has seen sales soar as shoppers got a taste for its premium wines. Now it is planning a further assault on rivals by aiming to put a store on every High Street and install sophisticated displays for its popular wines, and redesign its garish orange-and-blue signs.”
Sainsbury’s is to fight back against Amazon with a one-hour grocery delivery service in London (The Guardian). Staff on bikes will peddle up to 20 items in south-west London via the Chop Chop app. “Chop Chop! Sainsbury’s cyclists to deliver groceries in an hour”, is The Times’ headline. “Londoners fed up with bicycle couriers hurtling down streets, look away now: there are about to be even more of them as J Sainsbury tests a one-hour grocery delivery service in the capital.”
Supermarket beer sales have overtaken pubs for first time as a result of bulk retail price deals plus changing habits and tastes among drinkers, The Guardian writes. Of the 44m hectolitres (7.74bn pints) of beer sold in the UK during 2015, 51% was sold in the off-trade, which is dominated by large supermarkets, according to the British Beer and Pub Association (BBPA). The remaining 49% was sold through pubs, clubs and other licensed premises.
The Financial Times writes that discussions to create the world’s second-biggest Coca-Cola bottler with combined sales of $10bn have reached a critical phase amid growing market scrutiny on whether the two Japanese beverage groups involved can strike a deal by the year-end. Coca-Cola East Japan and Coca-Cola West are attempting to transform the Japanese groups into Coca-Cola’s main consolidator in Asia.
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