ALDI has hailed its growing patronage and pledged to “provide the lowest grocery prices in the UK” as the cost of living crisis worsens for millions of households.

The discount supermarket, which earlier this month broke into the “big four” leading UK chains, saw profits slump significantly last year after the firm witnessed rising costs and invested in pricing.

The UK operation of the German discounter revealed that pre-tax profits tumbled by 86.5 per cent to £35.7 million in 2021 compared with the previous year.

Sales for the full year hit £13.645 billion, up 0.9% on the previous year.

The supermarket, which said it would return its business rate relief in full to HM Treasury, said profits had fallen after the investment in lowering prices, increasing colleague pay and pandemic-related expenses.

It pointed to customer figures that pushed Morrisons into fifth place in a supermarket sector dominated by the industry’s traditional giants, also including Tesco, Sainsbury’s and Asda.

It added 1.5 million new customers in the last three months, with 19.1% growth, and plans to open 16 new stores in the next 12 weeks as part of an ongoing £1.3bn expansion including in Scotland.

READ MORE: 'Big four no more’ as discounter Aldi pushes industry giant aside

Aldi said in its annual trading update that whilst sales growth in the UK and Ireland had slowed in 2021, trading had accelerated quickly in the past six months as pandemic restrictions were lifted and rising living costs affected shopping habits.

As well as market share rising 1.2%, the percentage of households shopping at Aldi also rose to 65%,.

It said sales of its “specially selected” range had increased 29% in the last 12 weeks.

Aldi said its buying teams were “working to counter the impact of inflation” and maintain its discount against traditional full price supermarkets.

Aldi, which operates over 970 UK stores including 103 outlets with around3,400 employees in total in Scotland, is also to include expanding or relocating dozens of existing stores and developing its network of distribution centres and technology infrastructure to support growth.

It said its UK expansion is set to create over 6,000 new jobs this year.

HeraldScotland: Giles Hurley, chief executive of Aldi UK and Ireland. Picture: AldiGiles Hurley, chief executive of Aldi UK and Ireland. Picture: Aldi (Image: Aldi)

Giles Hurley, chief executive of Aldi UK and Ireland, said: “The cost of living crisis is worsening, and it’s being felt by millions of households across the UK.

“It’s in times like these when our customers rely on us the most, which is why we’re focusing on continuing to deliver our longstanding price promise by offering the lowest possible prices in Britain, every single day.

“It’s also a time when Aldi comes into its own. From our carefully selected range to our smaller format stores to our trademark efficiency, we can leverage our unique approach for the benefit of all of our customers. Independent research shows our discount is as compelling as ever and that’s why more and more people are switching to Aldi.

“We will do whatever it takes to maintain our discount to the traditional full price supermarkets and keep grocery prices as low as possible for the millions of customers that shop with us.”

On profit reduction, he said: “Preserving our price discount and rewarding our people will always be more important to us than short-term profit.

"Being privately owned means we can keep our promises even when times are tough.”