Showing posts with label business model. Show all posts
Showing posts with label business model. Show all posts

Friday 11 March 2016

Staff wages - Aldi Ireland’s hidden extra in the battle for market share

Given Aldi’s natural reticence, a surprisingly detailed 2,000 word article in today’s Irish Times gives some useful insights into the Aldi business model, much of which can be applied to its UK operation.

The article describes Aldi as a logistical and ergonomic-driven machine, a finely-tuned operating model, where “everybody knows what they have to do, and how to do it”, which helps it keep costs to a minimum.

Moreover, its emphasis on exclusive surrogate labels means the packaging, the case it arrives in, the way it gets delivered and shipped to store in shelf-ready packaging, is all under Aldi’s control.

Also, just-in-case, mystery shoppers are employed at each store to ensure that theory is reflected in practice… 

However, the fact that staff are paid at, or above the living wage, and the discounter is known as the best paying retailer in the market, means if the same policy holds in the UK, Aldi will not have to absorb the additional wage cost increases that will put additional cost pressures on UK mults when they have to comply with minimum wage legislation.

Methinks the discounter's competitive edge may be sharper than we thought...?

Much more detail in the Irish Times Article