July 5, 2013

Aldi goes British

photo: The Grocer
Aldi UK top brass: Matthew Barnes, Tony Baines and Roman Heini
After 23 years of hard slog, it would seem that mega-rich Aldi has finally won the hearts & minds of the UK High Street.

The German discounter has beaten local giants Tesco and J. Sainsbury to win "The Grocer of the Year Award".

At all events it is illuminating to see members of its secretive management in bow-tie at London's historic Guildhall — without turned-up collars and dark glasses.

The annual prize awarded by The Grocer is nothing less than a knighthood for the Aldi Süd subsidiary which has been growing far faster than the overall market over the last two years.

According to market researchers Kantar, annual sales growth has averaged 30 per cent throughout 2013. Aldi's 500-odd stores now have a 3.6 per cent share of the UK grocery market outpacing rival Lidl (3 per cent).

Here in Old Germany, one is a little surprised, however, at the explanations behind the decision of the judges.

No longer a discounter?

They seem to feel that Aldi is "no longer a discounter" and once sold food that was "as poor quality as it was cheap" with general merchandise accounting for "a huge percentage of sales"!

Correction for our Anglo-Saxon friends: Aldi may have subtly softened its hard discount image into a broader appeal that is successfully striking a growing chord with middle-class and aspiring-middle-class Britain, but it is still a discounter and has always been a stickler for quality.

Admittedly, my father once loved a power drill he bought on special offer from a local Aldi so much that he could only be restrained with difficulty from taking it to bed with him, but when was GM ever so dominant?

So the Brits have learned to love German discount, but have they also understood it?

Alles very British

Let us not be churlish, however. The prize was a tremendous honour for Aldi and they clearly intend to return the compliment. Back home Aldi Süd has just launched a new promotion for its "Taste of British Isles" range.

Under the slogan "Alles Very British", it markets such venerable products as fish & chips, Irish rump steak, baked beans, toffee, spreads, Scottish shortbread fingers, English tea and wine gums.

Clearly, what has never succeeded in politics (a trans-Channel love affair between Germans & Brits) is quietly being achieved by Aldi.

 
Related article in German: By Mike Dawson in Lebensmittel Zeitung, no. 26, 28.06.2013

 

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Comments for this article are closed.

  1. Robert Clark
    Created 10 July, 2013 16:10 | Permanent link

    Dear Mike,

    I would take minor issue with your point about Aldi no longer being perceived as a straight discounter in the UK when it remains essentially as such. If my perception of their current tactics is correct, based to an extent on those of Lidl, where I am a frequent shopper, they are both attempting to attract a broader spectrum of UK shoppers by subtly modifying their offer. To increase their current 3-4 per cent market shares they need to break through the C2DE customer barrier by enticing ever more ABC1s into their stores with a leavening of premium lines (not national brands, of which they stock some key examples).

    It is certainly working a treat at my local Lidl. Their ongoing and seasonally enhanced Deluxe lines, their new upmarket wine selection over and above the basic one, their taste test promotional material etc. etc. are all working well. More adventurous recent store location and town selection, too, are playing a part. Plus customer service standards and tidier store environments, shorter queues etc. etc.

    It is not rocket science, but it is working in terms of beginning to wean some UK mass market shoppers off their weekly one-stop shop at Asda, Sainsbury's or Tesco. Somewhat cash-strapped now, with disposable income running a little behind inflation as salaries flat-line, a rising proportion of shoppers are now making two shops. Many can no longer afford to ignore the slightly higher cost of a one-stop shop. I now mostly go to Lidl and Waitrose, and the loser squeezed in the middle market has been Sainsburys (nor do I bother at all any longer with the Asda, next door to my Lidl).

    Best Regards - and keep up the good work

    Robert Clark

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