Aldi Plans Major U.K. Drive

WARWICKSHIRE, United Kingdom - Discount retailer Aldi is planning to open 200 more stores in the United Kingdom over the next seven years as part of a $946 million expansion drive, according to published reports.

The German chain and the ninth-largest retailer in Europe by sales volume currently has nearly 280 units in the U.K., but aspires to increase that number to more than 450 within five years. It is also eyeing long-term prospects that call for a network of up to 1,500 U.K. stores, according to published reports.

In the 15 years it has operated in the U.K., Aldi’s impact has been less than dynamic, with less than a 1 percent market share amid competing discounters across Europe that have increased their share by an average of 3.2 percent in the same period, say international industry analysts. However, Aldi is hardly alone among limited assortment chains in finding the U.K. an extraordinarily tough market, given the fact that large players such as Tesco, Morrison, and Wal-Mart's Asda are aggressively cutting prices and offering more distinct value ranges.

Believing that about one-third of its existing U.K. stores are situated in inappropriate locations, Aldi said it intends to move them to new “up-market” sites, and also to expand into more high-end product lines.

The German-based chain is the ninth-largest retailer in Europe by sales volume. It recently opened a distribution center in Scotland, where it has just 19 stores, to press further into the north. Markus Beher, regional managing director for Aldi Scotland, said in press reports that the limited assortment chain has been repositioning itself since 2000 by reviewing its product range and relocating stores to more affluent areas.
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