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Aldi Targets Wealthy Londoners With New Stores And Posh Wine

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Aldi is making progress in gaining more customers in the UK | AP

Signs are afoot that discount supermarket Aldi is woo-ing middle class shoppers, as Britons and their European counterparts tire of cheap goods.

The German discount store is about to open a string of small stores in key locations in the capital as part of a plan to gain marketshare in the lucrative convenience store market.

Sainsbury's and Waitrose have already publicly stated their aims to up their convenience format in London, and Tesco already enjoys great success with its Tesco Express format. Morrisons too has looked to get in on the game with its M stores.

According to Retail Week, the first Aldi property will appear on the site of an old Peacocks store in Kilburn.

Property agents have reportedly been sought to find 6,000-8,000 square feet stores across the city for one format. The second format will see slightly larger convenience stores - 10,000 square feet - with parking for 30 to 40 cars attached.

Aldi sales have significantly risen in recent years, with Nielsen reporting sales soaring 38.9% in the 12 weeks to November 10.

The German discount chain also opened 29 stores in Britain last year and reportedly has plans to invest £181m in 40 new stores by the end of 2013, taking its estate to more than 500 branches.

But at home, Aldi is starting to struggle. According to a Bloomberg report, the supermarket is finding that low prices alone are no longer enough to win customers in its domestic market, as they want bright, tidy shops and a wide choice of brands.

A new store opened in the northern German town of Castrop-Rauxel is symptomatic of the change of direction for Aldi, which is normally known for its generic goods, limited selection, and aisles littered with boxes.

Shoppers at the outlet are greeted by a large glass wall that floods light onto orderly shelves, in-store bakery and a growing range of branded products such as Mars bars, Haribo sweets, and Nutella. The supermarket also has a large range of organic offerings, including yogurt and pasta.

Back in the UK, Aldi has also launched a new premium wine range, which it claims seriously undercuts prices in other specialists.

The supermarket told Harper's Wine & Spirit it had noticed a growing number of affluent customers choosing to shop at Aldi, with Nielsen figures showing the number of consumers from the wealthiest social classes shopping at Aldi has rocketed by 18%.

The range includes a 2004 Grand Cru Margaux, a Grand Cru Classé 2004 Margaux, a 30 Year Old Tawny Port and a 1973 vintage brandy.

Richard Perks, Mintel's director of retail, told Huff Post UK; "Although Aldi is low-price, it attracts a broad range of shoppers; savvy shoppers in particular like it.

"It is such a departure for Aldi though, as it's always been utterly single minded over its simple format, limited range and so on - this seems quite radical."

Aldi's German parent company was opaque when it came to disclosing its finances, making it difficult to predict its future. Despite this, what we can see from its financials in terms of its operations in the UK look good.

“Despite the lower operating margins at Aldi, our overall financial rating for the company is higher than some of its mid-market peers," Nick Hood, insolvency specialist from Company Watch, the financial health monitoring firm, told Huff Post UK.

"Aldi has a health score of 80 out of a maximum of 100, while Sainsbury's scores 71, and Tesco 60. All of them are in a strong position, but Aldi has no net debt and the balance sheet strength to support a move into the growing UK convenience store market."

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