If there is one thing the two discounters – Aldi and Lidl – care about above all else, it is beating each other.

So, Aldi UK & Ireland CEO Giles Hurley would most likely have preferred not to start this week fending off questions about Lidl’s sales growing faster than his own supermarket’s.

And not just a little faster: Lidl sales were up 7.8% in the 12 weeks to 4 August, making it the fastest-growing bricks & mortar supermarket for 12 months in a row, according to Kantar. Aldi has slipped to being the third slowest-growing, behind Co-op and Asda, with sales up just 0.5% year on year.

But today’s press conference for Aldi’s 2023 results was also an opportunity for Hurley to defend its strategy, including its lack of a customer loyalty scheme in the face of the popular Lidl Plus app.

Is Aldi at a disadvantage as a result?

According to Hurley, the answer is a firm no. “You build long-lasting loyalty with a commitment to keeping your promises,” he argued. “And our commitment around simple, straightforward pricing gives customers a certainty we know they want – that they’re getting the very best value every day in, in every basket and every shop.”

Loyalty introduces a “role of the dice for customers about what price they’re going to get on any given day, and there are question marks around whether that value is just perceived and not real and not real”, he added.

If so, it’s a roll of the dice that many Lidl shoppers appear to be embracing. Launched in the UK in 2020, its loyalty scheme has grown to become Britain’s fourth favourite after Tesco’s, Sainsbury’s and Asda’s [NIQ Homescan April 2024]. Along with its in-store bakeries – which Aldi also lacks – it has been named an important growth tool by analysts.

Aldi, however, is keen to point out the benefits of straightforward low pricing. “When it comes to our business model, we have been redefining what it is to be a discount retailer since we opened in the UK, whether that’s the size of our product range, our award-winning quality, our long-standing supplier partnership, our British provenance,” says Hurley.

“At the same time, we’ve stayed true to keeping our business simple and lean and efficient. And that’s important in ensuring that we can pass on savings and charge the prices we do. And I don’t think that will ever change either.

“It’s difficult for me to comment on the plans and strategies of our competitors,” he adds. “There will always be short-term fluctuations in business performance, but let’s look at our long-term story: 30 years of growth.”

What the data says

Kantar’s latest data also shows Aldi attracted more customers than Asda in the 12 weeks to 4 August. “So, I think that highlights very clearly that low prices don’t go out of fashion, and they never will,” says Hurley.

Yet something is going out of fashion at Aldi. Its market share stands at 10%, down from 10.2% a year ago, despite having opened 14 new stores so far in 2024. It is now in a race to open 23 more by the end of the year, and is even talking to No 10 about stumping up its own cash help local authorities process its planning applications faster.

Intriguingly, along with his well-practised and familiar lines on Aldi’s commitment to low pricing, Hurley leaves the door open for loyalty.

“Never say never,” he says. “But our focus continues to be guaranteeing simple, straightforward pricing.”

It’s a subtle change of tone from a supermarket whose rejection of any suggestion of loyalty has previously been unambiguously negative.

Aldi in Germany has already run rewards promotions offering shoppers a €5 discount voucher when spending €40 or more, and a number of recent reports have suggested the discounter is working on an answer to the Lidl Plus app at international level.

At a time when its UK sales growth has been on a steady downward trajectory for a year – now approaching zero – it would certainly seem to make sense.

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