Aldi says it is stepping up investment in the UK with plans to spend £900m and open more than 40 stores.

The company, which operates 1,092 budget supermarkets in the UK and Ireland, revealed sales rose 5% to a record £19bn last year It opened 40 stores but profits slipped by £2.6m to £433m as it cut prices despite cost inflation.

Giles Hurley, the boss of Aldi’s UK and Irish arm, said the German-owned business had “increasing confidence around growing our business”, claiming it already was the third largest UK supermarket in terms of items sold and customer numbers.

Asda is classed as the UK’s third largest supermarket by value of sales, just ahead of Aldi. Leeds-based Asda is less than one percentage point ahead of its German rival, with a market share of 10.6% in mainland UK, according to the latest data from Worldpanel.

Aldi will open 42 stores this year, with 30 opening in the next 10 weeks. It plans a similar number next year, stepping up investment by about £100m to £900m. Longer term, it is aiming for 1,500 outlets in the UK and Ireland.

“We could probably grow faster but we need to find the right sites in the right locations and have to go through a planning process which can, at times, be challenging,” Hurley said.

He added that “customers are feeling the pinch” against a backdrop of persistent inflation and the “continuity and clarity” of its range of cheap groceries had attracted 425,300 more customers.

He said the outlook for grocery inflation, which stood at 2.8% in August according to the British Retail Consortium, was difficult to assess until the impact of drought and extreme heat on UK crop yields was clear.

He said the industry was “not seeing systemic food shortages” but the climate crisis was creating “a real challenge” for food producers. He urged the government to treat the UK’s food system as “a national strategic priority” because “relying on imports leaves us exposed.”Hurley claimed that Aldi was the only grocery chain reducing prices. He said the loyalty discount schemes offered by many rival chains, including Tesco and Sainsbury’s, were “definitely a roll of the dice for customers and questions remain about how much of the value [they offer] is perceived rather than real”.

He said Aldi was winning over customers because it remained the cheapest place to shop in the market and would continue to invest to maintain that position by cutting prices. However, Aldi does not reveal sales performance in established stores – those open for more than a year – making it difficult to gauge how much growth is just the result of expansion.

Aldi’s growth is much slower than than that of its rival Lidl which is gaining market share with a loyalty scheme while allowing shoppers to order online and pick up in a store. Aldi has signed a deal withDeliveroo under which the courier firm’s workers will pick, pack and deliver Aldi groceries sold through its app.

The supermarket chain said it had committed to sourcing at least half its products through long-term supplier agreements by next year, giving its producers and manufacturers greater confidence to invest and make Britain’s food system less reliant on imports. Aldi said it spent £14bn with British suppliers in 2025 and about 80% of its sales come from them.