Economy 31 May 2024, 11:33am

Aldi incurs massive loss in Hungary in 2023

Portfolio

The annual revenue of the Hungarian operation of German supermarket chain Aldi increased by almost the same amount as the inflation rate in 2023, but the company was unable to generate a profit, according to a recent report. Aldi Hungary's tax liability was well over HUF 20 billion.

Last year, Aldi's net sales rose to HUF 490.2 billion from HUF 417.1 billion in 2022, an increase of 17.5% (annual average inflation in 2023 was 17.6%).

Its material expenses rose 19.4% yr/yr to HUF 424.1 billion, of which the cost of goods sold (COGS or ELABÉ) accounted for HUF 361.9 billion.

This shows a slight deterioration in Aldi's profitability, with a revenue-to-COGS ratio of 72.1% in 2022 and 73.8% last year, which also partly reflects the fact that the retailer has not been able to completely pass on the price hikes by its suppliers to consumers.

The total wage bill of manual workers increased by 26.1%, while that of clerical staff rose by 26.5%, reaching HUF 40.9 billion.

Aldi's operating profit fell to HUF -13.4 billion in 2023 from HUF 27 billion in 2022, somewhat offset by a positive result from financial operations, and so Aldi

ended the year with a loss of HUF 9.5 billion.

Aldi was last loss-making in 2014 and has been consistently in the black for the 8 years between 2015 and 2023.

According to Aldi's statement, it paid HUF 23.9 billion in taxes, most of which is accounted for by the sectoral special tax.

Cover photo: Getty Images