In early 2008, Aldi received full planning permission for a 1,278 sq.m. store at the Drogheda Retail Park

German discount retailer Aldi has announced plans for a significant Irish expansion with 35 new stores and 650 new jobs over the next three years. It is gaining from the recession similar to retail giant Wal-Mart in the US.

The group is also planning to open its second Irish distribution centre which will be located in Mitchelstown, Co Cork to supply outlets in the south of the country.

Today Aldi says it will spend €350m as it increases its presence in Ireland. It currently has 59 stores here and will open a further 17 by the end of next year.

Among some new locations for outlets will be Drogheda, Wexford, Mallow and Dublin.

Unlike conventional outlets discounters Aldi and its rival Lidl usually offer one brand of each product. They also have relatively low numbers of staff per store with Aldi employing an average of 14.

Over the past decade the two discount retailers have grown their market share at the expense of existing players. Today Aldi says it has a 4.5% Irish grocery spending.

In 1999, the German discounters Aldi and Lidl entered the Irish market for the first time.

Commenting on the expansion programme, Paul Foley, Managing Director of Aldi UK and Ireland said: “Our new €350 million investment underpins our commitment to Ireland and our on-going support to our customers, staff and Irish suppliers. We will open 17 new stores by the end of next year alone to satisfy Irish consumers demand for the quality and value Aldi provide. The new stores and jobs will be in towns and cities right around the country, in places like Drogheda, Wexford, Dublin and Mallow.”
 
 2008 has been a successful year for Aldi with the Company experiencing a 20% growth in sales since the turn of the year, increasing its share of the Irish grocery market to approximately 4.5%. Performance in recent months has been particularly impressive, with the numbers of Irish customers visiting an Aldi store in October 2008 up 25% compared to October 2007 and year on year sales for October up 23%.
 
 Aldi provides a top quality grocery offering at the lowest possible prices – typically 30% cheaper than the market. It is unique amongst discount grocers in Ireland in that it operates an Irish buying department committed to sourcing as much of its product range from Irish suppliers as possible. Over 40% of the groceries sold at Aldi are now sourced from Irish suppliers. This includes all the fresh beef, pork, lamb and poultry along with eggs, spring water, soft drinks, cakes, yogurts and artisan cheeses.
 
 “We are very pleased with the performance of our business in recent months and are poised to grow even further. New customers are trying Aldi because they’re more conscious of seeking out value for money. Speaking to our customers we find that they’re saving about €60 on a weekly shop that would normally cost them €200 elsewhere. A lot of new customers have been coming this year and thankfully many of them are staying because they find they’re delighted with the quality and value we offer. Many families are now changing their shopping habits and using us for their full weekly shop – and that’s what’s explaining the growth”, added Foley.

The London Independent reported last week that Aldi's sales growth accelerated to 36% in September and 33% in October, boosted by the financial crisis in UK banking.

Paul Foley said to to the newspaper: "You need sometimes a little jolt to try something new and the squeeze on consumers' finances has been an incentive to, at the very least, give us a try, and that is what I am putting down to the last two to three months' trend."

He added: "Thirty six per cent [sales] is record stuff. There is some [food] inflation, new store growth in that, but we have won a remarkable amount of new customers away from the supermarkets. We are continuing to grab more business and I think it will be very difficult to wrestle it away from us."

Aldi's pre-tax profits rocketed by 45% to £70m for the year to 31 December. Foley said this year's profits would be "robust" and at "similar cash levels", but he declined to provide a forecast. He added: "Profit growth will not be as dramatic as sales growth. We are investing in new stores, communications and advertising."

The Independent reported that the discounter, which has 444 stores in the UK and Ireland, is opening about one store a week, and will open 50 stores this year. It has also extended 66 stores in 2008. Aldi wants ultimately to open 1,500 in the UK, which would increase its share of the grocery market to 10 per cent and make it the UK's fifth biggest grocer behind Morrisons.

Foley said that Aldi was delivering strong sales across the UK and Ireland and that there was plenty of potential for growth, given that only 70% of the population has so far used its stores. "I have never subscribed to the idea there is food snobbery," he said.

Foley revealed that Aldi is involved in the ongoing bidding process in the UK to buy some of the Somerfield stores, which the Co-operative Group is not acquiring, but declined to comment further.