March 5, 2015

Aldi eyes start in Italy

Aldi crosses the Alps (source: Cartoonresource Fotolia)
Aldi trips off the Italian tongue so much more easily than Lidl that one would have thought them on the sunshine peninsula long before their arch-rival. In fact their fellow German discounter ventured across the Alps in 1992 and was joined two years later by Rewe Group subsidiary Penny Market.

In the 1990's, "sources close to Aldi" revealed that Austrian subsidiary Hofer had indeed taken a long hard look at bella Italia. At the time, however, group head office in Mülheim was said to have been deterred by the complex building regulations governing the numerous centri storici (historical town centres) which delight the world's tourists.

Nonetheless, the secretive retail giant confirmed exclusively to Lebensmittel Zeitung this week that it is reviewing the dossier. Local bureaucracy has hardly simplified in the interim. So what has made Aldi change its mind about the Italian job?

Of course Aldi would not be Aldi, if it did not immediately add that "no final decision has yet been taken". But the entry scenario is clearly propitious. According to PlanetRetail, the country's 60m consumers make for estimated annual retail sales of around €180bn.

The Top 5 retailers (Coop Italia, Conad, Auchan, Esselunga, Carrefour) account for just under 20 per cent of the national food market. This compares with a far higher level of concentration in Germany (83 per cent). Small neighbourhood stores still dominate the Italian retail scene, providing an excellent hunting ground for efficient discount systems.

Aldi South international logo
Aldi Süd's international logo: Soon to be found south of the Alps?
It will not have escaped Aldi execs that discounters are booming. Sales have been growing for Lidl Italia at an annual rate of 7 per cent over the last five years. In 2014 its 570-odd stores posted revenues of around €3.3bn. This makes the Schwarz Group subsidiary the no. 6 player, virtually neck and neck with local matador EuroSpin.

Aldi Süd (Aldi South), which has been on a roll in Australia, the US and the UK, is also said to be highly confident about its internationalisation potential. A new generation of managers has modified the traditionally ultra-cautious approach of Germany's most profitable discounter. Even expansion in China is no longer a taboo.

Logically, Aldi is said to be looking to enter Northern Italy first. Unusually in terms of its corporate culture, the privately-owned group, with estimated annual earnings well in excess of €1bn, might also consider a takeover. This would obviously kick-start entry in the game of catch-up with Lidl Italia (570 stores) and Penny Market (310). It would also reduce the rigmarole of labyrinthine planning authorisations for individual sites.

Benvenuto in Italia, Aldi?!

Related article in German: By Hans-Jürgen Schulz & Heike Balzer,
Lebensmittel Zeitung, no. 10, 06.03.2015

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Comments for this article are closed.

  1. Claudio Bombardieri
    Created 6 March, 2015 13:40 | Permanent link


    I am an Italian-speaking South African retailer with over 30 years experience in the African market retail. I live in Durban and currently work for Bargain Wholesalers, but wish to return to Italy as my mother still resides there and is getting very old. I should like to be close to her, she lives in Bergamo Gazzaniga.
    I would like to know if Aldi is in need of any new personnel for its planned venture in Italy?

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