Showing posts with label Aldi. Show all posts
Showing posts with label Aldi. Show all posts

Friday 24 February 2017

Aldi's down-to-earth proof-of-origin

According to ESM: The European Supermarket Magazine, Aldi Süd are piloting Isotope Analysis to guarantee produce source by locality/region...more details here.

Apart from savvy consumers’ interest in establishing the source of their food, this Aldi initiative will also help in allaying doubts regarding discounters ability to provide like-for-like produce at prices lower than the mults.

In addition to adding cost to the sourcing process, this will heighten consumer curiosity as to the origin of other products available in discounters.

In the UK, this increase in their costs would result in a reduction in the pricing advantage enjoyed by the discounters, but if this proof-of-origin initiative gives Aldi a competitive advantage, others will follow…

Interesting how the cookie crumbles...

Tuesday 25 October 2016

Aldi & Lidl as problem solvers?

Unlike the redundant-space, 80/20 issues of the mults, Aldi & Lidl see online as a way of reducing car-park congestion and queueing instore.

In an interesting twist on accepted wisdom that discounters are simply trying to imitate the mults, Simon Johnstone of Kantar Retail gives details how discounters innovate to solve the problem of 'custom-bunching' resulting from Aldi's Special Buys on Thursdays and Sundays.

Developing online focused on lifestyle helped Aldi spread the traffic...

A number of other examples are given in the article, all examples of discounter-specific creativity.

Given that much discounter growth is at the expense of brands, branded NAMs that can find ways of working proactively with Aldi & Lidl have to gain an advantage over the competition.

In other words, the combination of NAM creativity and discounters' apparent willingness to innovate in terms of - their - problem solution suggests ways forward for NAMs that are prepared to put the fire-fighting on hold and trigger a brainstorming session with Aldi or Lidl...

Wednesday 13 January 2016

Aldi's older UK stores growth slowdown - beginning of the end, or end of the beginning?

With Aldi growing new space by 10-15% per annum, the discounter is clearly racing to reach its full foot-print potential in the UK.

Although like-for-like sales in stores open more than 1 year are 1%, the emphasis has to be on making the Aldi offer accessible to the entire UK population, in the current flat-line market. Given the relatively low cost of opening new outlets, Aldi – and Lidl – are better able to afford a greater degree of geographical infilling than are the redundant-space mults.

It could therefore be said that Aldi are approaching the end of the beginning of the first discounter-wave in the UK.

With Kantar figures showing Aldi and Lidl attracting 1m more shoppers to their stores, resulting in a 13.3% and 18.5% jump in sales respectively, it can be seen that initial access to their offering can be lucrative for the discounters. Given that they are simultaneously pushing upmarket, successfully, and with no end to flat-line demand in sight, the discounters are surely pursuing the right priorities in this market.

Given eventual discounter outlet saturation, both players will then have sufficient financial momentum to focus on optimising like-for-like performance at local level, well in advance of any end in sight…

Meanwhile, branded suppliers have to find ways of sharing in this discounter growth. This means finding ways of moving from the ‘ongoing continuous relationship’ process that was possible with traditional retailers, to the ad hoc transactional dealings necessary with discounters.

For instance, a little-noticed announcement by Nestlé some weeks ago re highlighting its confectionery brands in all of Aldi’s German outlets, indicates one of the moves being made towards continuous collaboration with this increasingly important route to consumer for major brands…

To help your colleagues focus on this challenge, why not consider running a what-if on the Aldi-Lidl combination eventually moving from a 10% to a 20% share of the UK grocery market?

Tuesday 4 August 2015

Aldi-man new fashion range launch

Having landed a few heavy punches on the grocery mults, Aldi is now squaring up to the High Street clothing giants M&S and Next, with its first fashion range for men.

The new summer clothing range includes linen trousers (£9.99), smart chino shorts (£7.99) and Oxford shirts (£6.99), and for those NAMs wanting to avoid being recognised by other Aldi-NAMs, marl zipped hoodies are a must-buy @ £8.99….

Worth at least a store visit, but if you cannot afford to be seen in Aldi, some good in-use pics are available here.

Where is this headed?
Sharp-eyed followers of mens’ fashion will remember that Lidl beat Aldi to it via their launch of a men's fashion range in November 2014.

However, apart from resulting in a little headline-grabbing skirmishing, taking both initiatives together gives another indication of the extent of the discounters’ ambitions in the UK.

In other words, someone at Aldi/Lidl has to be assessing potential opportunities category by category, seeking the right blend of complacent-pricing and tunnel-vision that might respond to a Lidl proper discounting...

It costs little to try, and one discounter’s success automatically provides a pointer for the other…

Meanwhile, one can only imagine the additional disruption in the men’s fashion world should Poundland find a way to follow suit…?

Friday 17 April 2015

Free Aldi bus for students' weekly shop

                                                                                                           pic: An Focal

Given the discounter’s primary audience-mix of students and senior citizens, and the likelihood that carefully managed long term loyalty will eventually bridge the generation-gap, this new initiative indicates the degree of Aldi’s determination to optimise its market share long term…

Currently operating at UCD, Trinity, Limerick, DCU, and Dundalk Institute of Technology, Aldi plans to serve all third level campuses by the end of 2015.

“The bus service is completely free, anyone can hop on, you don’t have to live on campus at all, you just need to email the UL Aldi Bus Rep, book your spot and even if you don’t you can show up and if there are spaces available you can get on.  They have allocated stops for the bus so it’s safe, the students will be signed on by reps and they will make sure everyone is on again after they are finished their shopping.”

Aldi’s “University” page on its website features weekly promotions of healthy recipes and cooking guides, along with the cost of purchasing each meal, in a weekly shop of €34.

Not bad for the ‘foreign, downmarket, cut-price retailer’ that had the cheek to enter the state-of-art, up-market, big-space UK retail scene 25 years ago…

With an 8.1% share of the Irish market, Aldi have no plans for extending its bus-service to the UK, yet…

Thursday 9 April 2015

What if Aldi & Lidl grow at 10% in flatline?

Apart from politicians' assurances re post election growth, just suppose that we are into flatline growth for the next five years, at least...

Also given Aldi & Lidl combined share of 9% (see yesterday's NamNews) and a conservative (!) estimate of 10% growth vs major mults at 0%, the two discounters will reach 15% share by 2020...

The resulting issue for suppliers has to be, barring radical changes in discounter ranging policy, most of this growth will be via surrogate branding, at the expense of national brands...

Branded suppliers have a choice:
  • Either persuade the discounters to stock more brands...
  • Or find a way to optimise private label, and seek a fair share of the discounter action
...whilst the major mults mount the deepest price cuts ever, possibly fuelled by back to front margin moves...

Tuesday 3 February 2015

The Two Aldis - Some concerns for the future? - and a lot more anecdotal detail..

For decades the Albrechts, the billionaire dynasty behind the Aldi retail empire, have lived by two golden rules: live modestly and avoid publicity. Aldi founders Karl and Theo Albrecht were also as obsessive about thrift as privacy.

Having been accustomed to having access to far greater degrees of personal and business background re our other major customers, we have all watched the growth of Aldi with a mix of curiosity and frustration at the lack of anecdotal coverage to provide insight.

For this reason alone it may be worth a glance at this Irish Times article, revealing that Aldi are now just like most other family businesses, and perhaps a little easier to understand…

Tuesday 25 November 2014

What if Aldi UK keeps going?

Given its UK 2013 sales of £5,275m and growing at 25%, Aldi could reach £16bn by 2018.
In a flat-line market, this would make it twice the size the Co-op Foods business and say 50% of a major multiple, given zero to very low growth of its competitors in the meantime.

Apart from a ‘handful’ of brands, this means that most of its business would be in surrogate brands, at the expense of national brands, effectively taking demand from the branded market.

This suggests that brand-suppliers have to find a way of dealing with Aldi, either via 1-off discontinuous promoting, or through supply of surrogate labels…

And with Lidl showing similar signs, they should be added to a new trade strategy

Perhaps yesterday’s news of changes at the top of Aldi UK - our biggest story of the day - provides NAMs with an excuse to help your company revisit corporate policy re the discounters?

Thursday 14 August 2014

Where next for Aldi, Lidl and private label in the upturn?

Brand owners taking comfort in the belief that the swing to private label and the discounters’ surrogate brands (i.e. Smith’s coffee made exclusively for Aldi) is a temporary aberration due for correction in the current ‘upturn’, might lose a little sleep following the publication of new research on how consumer knowledge affects the choice of private label over national brands.

Mark Ritson gives a great summary of the paper and its implications in Marketing Week, where he notes
- Category knowledge (and the resulting confidence) is a key predictive driver in choosing private label
- ...if people are buying private labels not because they are trading quality for lower prices but because they know these products are as good as the manufacturer brands (Aldi, Lidl and private label will not lose share in the upturn).

Mark’s Marketing Week article is much more accessible, but it can also pay to go back to the original research paper for more details on OTC medicines and Pantry Staples. The paper also gives anecdotal insights such as … the welfare claims we make (for medicines) depend on the assumption that information per se does not affect the utility a consumer receives from a product. If, for example, believing that national-brand aspirin works better actually makes national-brand aspirin more effective at reducing headaches, then informing consumers could actually make them worse off…

The original paper concludes:
  • Across a range of products we find strong evidence that more informed shoppers buy more store brands and fewer national brands.
  • Consumer information plays a large quantitative role in health categories, where our estimates imply that expenditures and market shares would change significantly if all households behaved like expert shoppers.
  • By contrast, the role of consumer information is smaller in food and drink categories, where our estimates suggest much smaller gaps between expert and non-expert shopping behaviour...
    i.e. a moderately savvy consumer is likely to have more confidence in opting for private label food and drink, than medicines…
NB. The researchers emphasise that the study was limited to examining the effects of information on quantities and prices. If consumers were to become more informed, markets would adjust on other bases as well. In particular, a more informed population of consumers might change whether and how much firms choose to advertise their products, as well as which products are introduced to the market. 

NAM Implications:
For many years we have been educating the consumer to be more savvy in their choice of our brand, and have been helping them place the brand within a functionally-based category context…

Have we been inadvertently driving them at the private label/surrogate brand in the process?

Thanks to Guy Cuthbert for the pointer…

Monday 9 June 2014

Factoring Aldi into your trade strategies

Despite its rate of growth and probably because of the fact that there is little national brand potential in Aldi, branded goods suppliers may not have a way of giving Aldi the 'status' it deserves within trade strategies...

This may be because most companies focus planning resource on finding ways of growing the business, especially in flat-line times... They may also be tasked on establishing reasons for falling sales, but this emphasis may fail to see beyond corporate rear-protection.

Instead, why not consider devoting one of the planners (or one day a week for smaller companies) to focus on sources of business loss and and their progression, in terms of increasing threat in the future?

In other words, treat significant sources of loss with the same emphasis as sources of growth. This would then provide a way of raising Aldi's profile within the company to a level commensurate with its importance in the market...

Or perhaps it is preferable to wait until it is responsible for 10% loss of sales?