Aldi plots major expansion as profits surge, but Oliver Bonas and Dobbies admit issues
There’s a mixed shopping basket of news on the big store front with Aldi plotting a major expansion in the UK as profits surge, but Dobbies and Oliver Bonas suffering difficulties.
With all having a card offer anything that happens to them concerns the greetings industry, and the major plus is that the German discount supermarket – where everyday cards are now supplied by Cardfactory in all stores, with seasons tendered for – has reported a 250% increase in UK pre-tax profits, reaching £536.7million for the year to 31 December, 2023, up from £152.5m in 2022.
Having overtaken Morrisons to become Britain’s fourth largest grocer in 2022, Aldi has been losing market share this year as it expands more slowly than rivals including Lidl, and now plans to invest £800m during this financial year upgrading its technology infrastructure, increasing the number of distribution centres and refurbishing 100 of its 1,020 stores as well as opening 23 new ones by the end of the year with a target of 1,500 throughout the UK.
It invested almost £100m in 300 price cuts over the past three months, and spent an extra £1.3billion with its 5,000 British suppliers this year, although its share of the grocery market dropped to 10% in the 12 weeks to August, down from 10.2% the previous year.
Giles Hurley, ceo of Aldi UK & Ireland, said the slowdown “isn’t surprising, given that we’re lapping some very high previous-year figures”, and he added: “Another factor is we’ve been reducing prices ahead of the markets. Our prices are lower on average than they were a year ago.
“As we head towards the Christmas trading period, we’re all set to launch our biggest and best-yet seasonal range, including hundreds of premium range products at unbeatable prices for our customers.”
Over at lifestyle retail chain Oliver Bonas, winner of the Best Non-Specialist Multiple Retailer Of Greeting Cards at the 2023 Retas Awards, and a 2024 finalist, has seen its profits falter as it has battled growing interest rates and high inflation.
In stark contrast to 2022, where the retailer’s profits surged 21% to £9.1m from £7.7m, the year to 31 December, 2023, saw a drop to £6.8m, although sales were up 18% to £136m.
The retailer has 83 outlets and said the overall economic backdrop over 2023 led to “subdued discretionary consumer spending”, noting it continued to invest in its store estate over the year, opening seven new shops as well as relocating or increasing the size of eight others.
The brand said it remained committed to its multichannel approach, and would continue to invest in new stores, relocations, refurbishments, and its websites.
At Dobbies, which won the Best Garden Centre Retailer Of Greeting Cards Multiple at the 2022 Retas, the company has not commented on speculation that it’s planning a major financial overhaul which could lead to store closures and rent reductions.
The business was sold by Tesco to a group of investors in 2016 and is now controlled by major US investor Ares Management after a restructuring of its debt 18 months ago,
Sky News has reported that City sources said FTW Consulting has been drafted in to work on the restructuring plan, although it is not clear how many of its 77 sites Dobbies plans to close – all of which have significant card, calendar and stationery sales – or the impact on the 3,700-strong workforce.
