July 25, 2014

Aldi goes to school

The Dawson brothers in school uniform in 1964 (photo: Ken Dawson)
English tradition: Two boys in school uniform. One became a stockbroker, the other went to the dogs...and became a journalist
Aldi's audacious entry into the UK school uniform market has savagely undercut the big local multiples by at least 40 per cent.

Marketing an entire kit (two polo shirts, a sweater and a pair of trousers or skirt) for just £4 (€5) at the beginning of the school summer holidays certainly looks a winner.

However, the move has rekindled public debate in the media as to whether the German hard discounter is loss leading on non-food items. And, in the wake of the Rana Plaza tragedy in Bangladesh, commentators have also asked whether such a low price is possible while adhering to international labour & safety standards.
 
Meanwhile the average German, fascinated by this institution for English children, looks on with amusement. At the very least, Aldi has shown once again that it can burrow into the social fabric of this strange island people and be more British than the Brits themselves.

Uniforms for the people

Unlike in Germany or the US, school uniforms are often compulsory in the UK where they don't necessarily have the same fee-paying, preppy image. Some educationalists regard them as an attempt by "the Establishment" to turn children into soulless conformists. Others praise school uniforms as a great social leveller protecting kids from what has been called the "fashion designer arms race".

But what a crusher for all families on a low budget! The prices of local rivals (Tesco: £6.50; Sainsbury's: £7.33; Walmart/Asda: £7.50) look positively pathetic in comparison.

Thankfully, the days are now gone when it was only possible to buy very expensive school uniforms from designated suppliers at inflated prices. But Aldi's new rock-bottom price will still be appreciated by those families whose ever growing children even wear school uniform on social occasions because they are too hard-pressed to buy smart casual clothing.

A social debate

Perhaps it is not just a sign of the times, but also a good one that numerous participants in social media fora have questioned whether the Aldi pricing can really be socially compatible.

Although cotton prices have fallen substantially since their peak in 2010, Aldi will still have the labour costs of cutting, sewing, trimming etc. and of transport from southern climes. So is the discount giant loss-leading and/or guilty of sweatshop labour?

This type of debate has been going on in the German trade for years, whether stimulated by disgruntled competitors or by those with a troubled social conscience. Historically, Aldi Süd (Aldi South) has an excellent record on social audits, and sister company Aldi North was admonished only once by the Federal Cartel Office for selling staple food items below cost price in September 2000.

The no-frills retailer has only recently confirmed to local media that its suppliers must comply with a social monitoring programme requiring audit reports from production sites. The company also insists that it observes all applicable national laws, industry minimum standards, ILO and UN conventions etc.

Very British

Aldi is the retail brand in Germany and is really trusted by local consumers. Therefore, the discount giant would have a lot to lose by not adhering to its own standards.

Last but not least, it is a common misconception that workers automatically suffer more when consumer end prices are low. Makers of fashion garments with gross margins of 400 per cent or more have proved to be just as capable of turning a blind eye to abusive work practices as some textiles discounters have been.

At the end of the day, it all comes down to operational efficiency, at which Aldi excels, and the ethos of the company concerned. So the general debate is positive, but all self-appointed industry watchdogs must check their facts first and not jump to negative conclusions.

Otherwise, the only alternative for retailers and suppliers would be a return to national production. That would boost home employment, but increase prices and inflation while reducing investment in threshold countries. Sometimes one has to be careful what one wishes for. 

To conclude on a very much lighter note, one wonders what Aldi will be up to next? Strawberries for Wimbledon, ladies hats and horses saddles for Ascot? Or will the company strive to be a "purveyor to Her Majesty the Queen"? Then we would have to call Aldi Süd, Royal Aldi...


Related article in German: By Hans-Jürgen Schulz & Mike Dawson in Lebensmittel Zeitung, no. 31, 01.08.2013


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Comments for this article are closed.

  1. Ruth Raphel
    Created 31 July, 2014 20:10 | Permanent link

    Today's column

    Dear Mike,
    This is one of my favorite columns. I love companies that are good at whatever level of consumer they serve, especially if they are ethically responsible.
    Reminds me of when Murray wanted our retail business (Gordon's) to enter the uniform business to supply our local Catholic schools. He went to visit the head nun of each school with samples. He offered the nun one free set for any child whose family could not afford the expense. Within 3 years we owned the uniform business in Atlantic County...and kept our promise of free uniforms.
    Congratulations on good reporting,
    Ruth Raphel

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