Aldi Warns Food Prices Could Rise If Business Costs Increase

Aldi has warned that food prices could rise if Chancellor Rachel Reeves introduces new measures in the November Budget that increase costs for businesses.

Speaking to The Times, Giles Hurley, chief executive of Aldi UK & Ireland, said the supermarket had already absorbed higher costs from government policies such as the employer national insurance increase and a new packaging levy, but warned that further burdens could have a “ripple effect” across the sector.

“If you increase costs for businesses, ultimately that could result in higher prices for customers,” Hurley said. “We’ve done everything we can to shield shoppers so far, but the pressure is real.”

Despite sales rising to £18.1 billion in 2024, up from £17.9 billion the previous year, Aldi’s profitability has declined. Operating profit dropped to £435.5 million from £552.9 million, while pre-tax profit fell to £416 million from £536.7 million in 2023. The retailer attributed the decline to investments in price cuts, higher staff wages, and store expansion.

Aldi’s market share reached 10.8 per cent this year, with seven in ten UK households now shopping at the discount chain. Demand for Aldi’s premium own-label range has also grown strongly, with sales up by around 14–14.5 per cent as consumers opted for affordable indulgence at home rather than dining out.

The supermarket is pressing ahead with a £1.6 billion investment plan to open 80 new stores over the next two years, adding to its current total of 1,060 branches, with the goal of reaching 1,500. Hurley said location remained a barrier for some potential shoppers, adding: “People tell us they’d use Aldi more if there was a store closer to them.”

Alongside its warning on costs, Aldi called on the government to increase support for British farming to strengthen food security and help stabilise prices in the long term.