The German grocery giant Aldi has built a global reputation thanks to its low prices and high-quality private-label products.
Despite inflation pressures, geopolitical tensions, and tariff hikes, the retailer has remained committed to affordability, cutting the prices of over 900 products so far this year.
However, that promise is becoming increasingly difficult to keep, leading the company to make a shocking revelation that was much dreaded by millions of families.
Aldi UK CEO Giles Hurley has warned customers that prices may soon increase as operating costs surge under the UK government’s new policies.
Hurley revealed to the BBC that Aldi has already spent more than £300 million to shield shoppers from rising costs.
“Any policies which affect the operating costs of business should be considered very, very carefully because of the very real risk they find their way… back into the food system and onto prices,” he said.
Aldi CEO issues a warning to consumers about potential price increases.
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The cause of rising costs for UK retailers
Aldi’s cost increases stem primarily from changes introduced in the UK’s national budget, a yearly financial statement made to the House of Commons by the Chancellor on the nation’s finances and the Government’s proposals for changes to taxation, as defined by the UK Parliament.
Within this budget are the National Insurance contributions (NIC), taxes paid by employees, self-employed people, and employers based on earnings and profits. These contributions fund the National Health Service (NHS).
In April 2025, the UK’s NICs rose from 13.8% to 15% on salaries above £5,000, increasing employers’ costs overall.
Adding to the industry’s concerns, the Food and Drink Federation forecasts that inflation could reach 5.7% by December, before easing to 3.1% by the end of 2026.
Retailers beg the UK government not to increase taxes ahead of the budget updates
Aldi is not alone in sounding the alarm regarding rising retail prices. In August, over 60 UK retailers wrote to Chancellor Rachel Reeves, urging her not to impose further tax increases.
They argued that government measures have already added £7 billion in new costs to the industry and warned that further price hikes could damage the retail sector, causing the closure of hundreds of stores.
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“As retailers, we have done everything we can to shield our customers from the worst inflationary pressures, but as they persist, it is becoming more and more challenging for us to absorb the cost pressures we face,” the letter read.
According to the British Retail Consortium, food inflation is expected to hit 6% this year, while 100,000 retail jobs have already been lost over the past 12 months.
Aldi’s expansion plans amid uncertainty
The concerning cost increases come as Aldi announced a £1.6 billion expansion plan to open 80 new stores over the next two years, adding to its existing 1,060 UK locations.
Despite reaching record annual sales of £18.1 billion, Aldi’s profits fell by over 21% to £435.5 million.
The company claimed the decline reflected its ongoing investments in infrastructure, higher staff pay, and its determination to keep prices as low as possible for customers.
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