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A surge in demand for its premium range has helped Aldi to a record Christmas as year-on-year UK sales shot up by more than 15% during December.

CEO Matthew Barnes said it was the Aldi’s busiest-ever Christmas as shoppers switched from “more expensive” rivals to flock to the discounter.

The uplift has pushed Aldi’s total sales in the UK and Ireland during 2017 beyond the £10bn barrier for the first time, the discounter said this morning.

Soaring demand for its premium Specially Selected products contributed to the Christmas boost as shoppers sought affordable luxuries over the festive period, with sales of the range increasing by more than 30% year-on-year over the month.

Top-selling products in the range included mince pies, sweetcured gammon joints topped with a gingerbread crumb, Aberdeen Angus beef roasting joints and Irish cream liqueur.

“This was our busiest-ever Christmas as millions of festive shoppers switched to Aldi from more expensive food retailers,” CEO Matthew Barnes said.

“Although we saw strong growth across all categories, the performance of our premium Specially Selected range in particular surpassed all expectations.

“This is a clear sign that shoppers knew they could indulge in Christmas treats and festive essentials at Aldi for a fraction of the price they would pay elsewhere.”

Aldi sold more than 6.8m bottles of wine, champagne and Prosecco during December – equivalent to over 200,000 bottles per day. It also sold more than four million mince pies and more than 100 million packs of veg, including parsnips, sprouts and carrots.

However, analysts at Bernstein argued the results were not as impressive as last year. They calculated that Aldi’s like-for-like growth in December, having factored out new space and inflation, was 2.5%. This compares with 5% like-for-like a year earlier.

Following the bumper festive period, Aldi has also announced today that it will pay all store assistants a minimum hourly rate of £8.85 nationally and £10.20 in London from 1 February 2018, reaffirming its position as the UK’s highest paying supermarket.

Aldi also pledged to match the Living Wage Foundation’s recommended rates of £8.75 nationally and £10.20 in London for all of its employees from 1 February 2018.

Barnes added: “Our store colleagues are the cornerstone of our business. Without their hard work and dedication day in, day out, we would be unable to provide customers with the lowest grocery prices in the UK.”

Bernstein analyst Bruno Monteyne said that wage rises and a more upmarket proposition would put more pressure on Aldi’s margins.

“In the most recent annual report (for 2016) Aldi’s FY margin fell by 90bps to +2.4%,” he added. “In our view this was driven both by the competitive action of the other supermarkets and by Aldi’s shift towards a higher cost and service model. This release contains further evidence that Aldi is generating growth by moving upmarket with growth driven by their premium Specially Selected products, which have increased 30% YoY. We expect that we will continue to see margin pressure when 2017’s results are reported in October.”

Aldi added 76 new stores to its store estate during the last 12 months, bringing store numbers to 762 as part of its long-term strategy to have a network of 1,000 stores across the UK by 2022.

“We see significant capacity for further growth as there are still more than 400 towns and cities across the UK without an Aldi store,” Barnes said.

“Shoppers in these areas consistently tell us they would shop at Aldi if they could, and we are committed to meeting this demand for new Aldi stores.”

Morning update

Significant new supply contracts with McColl’s and Costcutter in the wake of the Palmer & Harvey collapse gave Nisa Retail a timely Christmas boost.

Total sales in the 10 weeks to 31 December at the wholesaler and c-store specialist leapt 17.7% to £277.2m.

The strong trading performance reflected an increase of 269 stores served in the 10-week period, with substantial organic growth of 106 stores and two new contract wins totaling 163 stores.

Nisa stepped in to shore up supply to 23 McColl’s stores in the wake of Palmer & Harvey’s collapse at the start of December. However, the move is only a short-term measure before Morrisons takes over as exclusive supply partner this month.

The group also joined a host of wholesalers supplying Costcutter in December, supplying selected stores for the first time since 2014. In addition to the 140 Costcutter stores that recently commenced trading with Nisa, a further 1,090 are expected to start later this month.

“I’m pleased to report that Nisa has enjoyed good Christmas trading in the 10 weeks to 31 December,” Nisa Retail CEO Arnu Misra said.

“We successfully invested in promotions to assist our members over the key festive trading period, resulting in positive like for likes and good organic growth in store numbers.

“The total number of stores served by Nisa was also increased by two large new contract wins. Nisa has delivered a strong programme to help drive sales and footfall in our members’ stores, and with the support of our members, we have built a solid foundation for 2018.”

Nisa added its fresh range also boosted sales by 23.1% to £43.1m over the festive period, demonstrating the business’ increased strength in this category. It highlighted increased sales of pre-pack fruit, up 38.1%, pre-pack vegetables, up 38.6%, and ready meals, up 43.7%.

Costa Coffee owner Whitbread has appointed former FA, Royal Mail and ITV CEO Adam Crozier as its new chairman.

He will replace Richard Baker when he retires from the board at the end of the financial year on 28 February 2018 after nine years with the group, including four as chairman.

Crozier, who is currently the senior independent director at Whitbread, has extensive experience as chief executive of Saatchi & Saatchi, the Football Association, the Royal Mail and, most recently, ITV, where he served as CEO until June 2017. He joined the Whitbread board in April 2017 and became senior independent director in September 2017.

Richard Baker said: “As I now approach my ninth Whitbread year end, we are executing our strategic plan to build a bigger and better Whitbread for the benefit of all stakeholders. We have a well established chief executive and executive team, a refreshed board, and considerable momentum in delivering this plan.

“This aligns with a personal intention I had, earlier last year, to progressively scale back my business responsibilities, so now is the time to hand over the chair. Adam has had a long and successful executive career and I am pleased the board has selected such a strong candidate to lead Whitbread through its next era of development. It has been a privilege to work for Whitbread during such a time of growth and success. Hosting the recent 275th year celebration was a proud and poignant moment for me, given how very few companies achieve such an extraordinary milestone.”

Crozier added: “Whitbread has two great brands in Premier Inn and Costa, with 50,000 colleagues delivering terrific customer service every day. We have a very strong management team and an exciting plan to continue to deliver growth in our core UK businesses, whilst developing our international business through growth in Germany, China and Costa Express.

“I am delighted to become chairman of Whitbread and to help steer the company through the next chapter of its long history. I would also like to thank Richard on behalf of the whole Whitbread team for his wisdom, enthusiasm and commitment during his nine years on the board, during which time the company has grown earnings each year and created significant value for shareholders.”

After Next delivered better-than-expected Christmas results yesterday, Debenhams has this morning provided a shock for the high street. The department store chain issued a profits warning as it brought forward its Christmas trading update by a week. It said profits would be between £55m and £65m – way below analyst expectations. Shares have nosedived more than 20% in early trading as a result.

Yesterday in the City

Shares in Next soared yesterday after the high street bellwether issued a better-than-expected Christmas trading statement. It reported a 1.5% rise in full-price sales over the festive season, beating its own predictions of a tough Christmas. The stock jumped almost 7% as a result.

It also provided a boost for Primark owner Associated British Foods (ABF) and Marks & Spencer (MKS), up 2.1% and 1.4% respectively.

There was little news around to drive share activity for most food and beverage firms. However, Ocado (OCDO) surged 7.8% to 423p as speculation ran rife that it was poised to follow up its first international licensing deal with Casino with a second agreement this year. Markets are now speculating it is set to reveal another deal with Swedish retailer ICA Gruppen, with reports in Sweden saying a deal is ‘imminent’ and likely to be announced early this year.

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