60 second update: Aldi

Date : 12 June 2013

Aldi is divided into two sister companies, Aldi Süd and Aldi Nord that act as distinct entities. Collectively they operate over 10,000 stores in 17 markets. In 2012 Aldi had an approximate turnover of €59.5bn with strong growth of 6.7% forecast for 2013. The domestic German market remains the most profitable for Aldi but as it nears saturation, international expansion remains a vital growth driver with key markets including UK, Australia and USA. Here we look at three priorities that will drive growth in 2013.

1. Building discount brand appeal

Aldi is continuously looking for ways to make its brand more attractive and develop its offer to pull in new shoppers. The modernization programme across the Aldi Nord estate has vastly improved the in-store environment, with 4,300 of its stores extended or refurbished since the programme began two years ago. Aided by range enhancements, these stores have attracted new shoppers, in particular young families, and a third of Aldi Nord regions are on track to achieve double digit growth this year.

Local tailoring has also played a significant part in building brand appeal particularly in Aldi Süd regions. In Ireland and Australia Aldi has tapped into the unusually strong influence of product provenance, with high profile marketing campaigns demonstrating how it is supporting Irish  and Australian products. In the UK Aldi has made its first venture into the lucrative convenience channel as it looks to adapt its offer to local shopping patterns. As Aldi looks to replicate the success it is having in these markets, we expect more local tailoring to be introduced in 2013.

2. Leveraging brands while enhancing private label

Aldi has become more receptive to branded suppliers with a variety of listings appearing in-store in the last year, with the concentration of brands varying by market. Aldi is leveraging its branded offering as a key footfall driver, listing category leading brands such as the recent addition of six Nivea products in its German stores. However, while opportunities exist for branded suppliers, Aldi's private label ranges remain its top priority and continue to account for at least 90% of the offer. Aldi is increasingly receiving industry recognition for the quality of its private label ranges and it will look to maintain this image through more product innovation and improved recipes for existing ranges. 

3. Continued availability improvements

Availability has risen up the list of priorities within the Aldi business over the last few years as it recognises the need to provide a consistent experience for shoppers and drive topline growth. Significant improvements have been made in-store and across the supply chain to deliver stronger availability in both fresh and ambient categories. Maintaining this is absolutely crucial for Aldi to ensure it continues its positive sales momentum. In markets where it is achieving double digit growth it will be particularly challenging to keep up with demand. Aldi will continue to push suppliers to achieve higher service levels and will welcome suppliers that can consistently react to seasonal demand as availability remains a core focus.

Want to know more?

Take a look at our latest Aldi store visit reports from Melbourne, Australia and Marburg, Germany. Or for a more detailed breakdown of Aldi's performance across its international estate, download our special analysis Aldi and Lidl: Global growth strategies compared.