Discount Aldi has said it has seen an extra 1.5m customers switch to shopping at its supermarkets over the past three months.
The supermarket was recently declared the country’s fourth biggest, knocking Morrisons down the list, according to Kantar data.
In full-year results to the end of December 2021, the budget retailer posted an 87 per cent slump in pre-tax profit, down to £36m.
Aldi pointed to price investment, staff pay, and pandemic-related expenses as to why profits fell by this much.
Sales saw a modest boost of 0.9 per cent in 2021, versus the year prior, with revenue hitting £13.6bn.
“Preserving our price discount and rewarding our people will always be more important to us than short-term profit,” Giles Hurley, chief executive officer for Aldi UK and Ireland, said.
Its private ownership meant the brand could “keep our promises even when times are tough,” compared to public firms or those with private equity backing.
The supermarket would “do whatever it takes” to maintain its discount to traditional full price supermarkets, he added.
Speaking to reporters on Monday morning, Hurley said the retailer had seen an “unprecedented shift in shopping behaviour,” with more price checking, more fixed budgets, and “many people only buying what they need for now.”
“Value has replaced convenience” for people when making up their minds on where to buy groceries, he added.
Shoppers were also shunning brand label items for private-own label products, which was helping to boost Aldi’s market share, Hurley said, with this trend set to “accelerate, because of the savings that can be achieved.”
An “unprecedented” move to own label products was “the most significant shift” of consumer behaviour Aldi had seen, Hurley told CityA.M.
As a 90 per cent exclusive label retailer, the business was seeing growth across all products and categories, with “particular growth” among fresh meat and other items that make up the main part of a meal, Hurley said.
“That signals to us that customers are choosing us as their main shop or first stop shop,” he added.
Aldi would also be reviewing staff pay again “by the end of this year,” just days after its rival Lidl announced a £39.5m investment making it the best-paying grocer in the country.
In July, Aldi said it was boosting store assistant pay further, with Londoners to receive £11.95 minimum per hour and store assistants outside the M25 to receive a base pay of £10.50 an hour.
Investment in pay sits at £43m so far this year, following an initial pay increase earlier this year.
Some 16 new stores are planned over the next 12 weeks, including in Broadstairs, Luton, Lincoln and New Southgate in London.
When asked about the pound hitting an all-time low compared to the US dollar, Hurley said it was “too early to understand or speculate” what the impact on the business could be, given many of its contracts were inked many months in advance.