German discount chain Aldi, which opened stores in Cork and Dublin late last year has leased a warehouse and office facility in Sandyford, Co Dublin, which will act as the group's regional distribution centre for the Republic.
The company said last night that the move is a further signal of its intention to build a strong presence in the Republic and challenge the established players in the food market. The Sandyford development has some 75,000 sq ft of warehouse capacity and 12,000 sq ft of office space. It will act as a temporary location until the group builds its own purpose built facility.
The group indicated last October that it would develop a regional distribution centre in Dublin in 2001 at a cost of some £15-20 million. However it is understood the leased Sandyford facility will be used for up to 5 years by the company. Previously the company's stores in the Republic were supplied from a distribution centre in Manchester, England.
"The long-term plan would be to build a development of the size which would be a purpose-built warehouse location of about 300350,000 sq ft with a regional office and regional director," said Mr Trevor Coates, managing director of Aldi UK and Ireland. Mr Coates told The Irish Times the high cost of land in the Republic was an inhibiting factor in Aldi's planned roll out of stores.
"To give the customer the quality that we want to give at the prices we're talking about we have to maintain a tight overhead and a fundamental part of that is prices we pay for land and building," he said.
This is likely to have been a factor in Aldi's decision to lease a temporary distribution centre in the short-term instead of building on a green field site.
Mr Coates said Aldi was either already on site or appealing store developments in Carlow, Tullamore, Dundalk, Galway and Castlebar. He said Aldi was creating a portfolio of sites spread geographically across the country in urban centres. He said any gaps in the network of stores could be filled in at a later date.
Aldi will open its third store in the Republic in Letterkenny, Co Donegal, later this week. This is the first store which the group has built to the standard Aldi format.
