Aldi chief executive Giles Hurley has entered the heated debate over supermarket profiteering, throwing his weight behind government efforts to tackle misleading promotions.
Hurley said the government is “right” to take on misleading discounts and promotions “in their work to tackle cost of living pressures,” placing Aldi firmly on the side of regulators.
“For too long, shoppers have been bombarded with discount signs and loyalty prices that can give the impression they’re getting a great deal, when the price they pay at the till can still be higher than elsewhere,” he said.
Prime Minister Andy Burnham earlier pledged to outlaw fake discounts as part of his bid to deliver households some “breathing room” on the cost of living.
Burnham said Westminster “has got used to telling people that everyday hassles” like phoney discounts and subscription traps “are just a part of life.”
“I don’t think that’s right, especially when the cost of living continues to weigh heavily on so many people’s lives,” the Prime Minister added.
The government’s intervention extends a broader push to force supermarkets and retailers to take responsibility for protecting consumers during the cost-of-living crisis caused by the Iran war.
Chancellor John Healey reignited a row with grocers this month, threatening retailers against taking consumers “for a ride at the pump or the till,” reviving tensions first raised by his predecessor Rachel Reeves.
Retailers responded swiftly, with the British Retail Consortium warning that the Chancellor’s language was damaging to an industry already operating on thin margins.
Jim Bligh, the BRC’s corporate affairs director, said: “It’s not helpful for the Chancellor to label retailers as potential profiteers when it’s one of the UK’s lowest margin industries.”
Bligh added that retail competition “is also keeping food price inflation down — on which the government has done nothing to support the industry,” sharpening the trade body’s criticism of ministers.
Hurley took particular aim at loyalty card schemes operated by rivals, arguing that schemes such as Tesco’s Clubcard and the Sainsbury’s Nectar card distort shoppers’ understanding of real value at the till.
“The problem with loyalty pricing is that it encourages shoppers to focus on how much they’ve supposedly saved, rather than how much they’ve actually spent,” Hurley told the Sunday Times.
“Taking £2 off a £6 product doesn’t make it good value if you can buy it for £3 somewhere else,” he said, directly challenging the pricing strategies of the UK’s largest grocers.
“And when so-called special prices are running week after week, shoppers are entitled to ask what the real price actually is. A permanent promotion isn’t the same as a permanently low price.”
Aldi, alongside fellow German discounter Lidl, has rapidly tightened its grip on the UK grocery market in recent years, forcing Sainsbury’s and Tesco to launch defensive “price-match” schemes in response.
However, both German discounters could face a slowdown in their expansion after the UK’s competition watchdog announced plans to close a loophole allowing them to block rivals from opening stores on nearby land.