September 23, 2011

Aldi's new store concept

Aldi store in Gent (photo: Horst Wagner)
Tired of being drab: Aldi Nord has spruced itself up in Ghent (photo: Horst Wagner)
Believe it or not, this grim-looking building represents a trendy new look for Essen-based hard discounter Aldi Nord (Aldi North), the frumpy sister of Aldi Süd (Aldi South). Aldi North's Belgian subsidiary has just opened its first "new generation" store in Mariakerke, a suburb of the pretty Flemish town of Ghent.

Retail experts believe that Aldi North could be testing this outlet in advance of an international rollout. There is also a trade rumour that the Ghent branch is a prototype for a revised concept soon to see the light of day in the German city of Lübeck.

Currently Aldi North (annual revenues: €2.8bn) runs 445 branches in Belgium. As in  the Netherlands, these are even more Spartan than the ones it runs in Germany.

Instead of the usual sombre corporate brown tones, lucky shoppers can now experience a strong "Aldi-blue" logo. More glass is used in the facades of the building and part of the ceiling so that even thrifty shoppers may enjoy more of that free commodity, natural daylight.

In an orgy of extravagance, customers are treated to light flooring, and even the price signs have been changed to white from an old-fashioned red/orange.

Big colour product photos

Large product photos are used to facilitate customer orientation within the store. Even drug store items have been given a bit of lighting, and higher-ticket non-food lines have been taken out of caged boxes and placed in glass cabinets.

The new store in Ghent is also clearly larger than Aldi Belgium's current average of 650 m² (7,000 ft²). The parking lot is more spacious than usual and the aisles are wider.

Apparently, Aldi North is working with two architects who have managed to convince its fantatical cost-reduction merchants that one does not have to look dull in order to convey a cheap-price message to one's customers. They point to the fact that many competitors have upgraded their stores recently and that Aldi Nord has hardly increased sales since 2009.

Still highly profitable

Aldi North, however, disputes the claims of some market researchers that revenues have actually fallen over the last two years. The company has certainly been hard at work recently on its own label assortment, and especially on its lacklustre deep frozen and convenience food offer. Packaging has also been redesigned and experiments are being made with an automated scratch bakery.

All this, though, should not be allowed to create a false impression. Unlike most major European retailers, Aldi North has retained its high profit levels in the midst of a difficult recession. However, the new store does represent a sea change for Aldi North whose management used to adhere dogmatically to the belief that it was enough to invest in durable building materials and to let high-quality, low-priced food speak for itself.

Cigarettes split the empire

Just to remind our non-German readers: The Aldi empire is divided into two parts because its founders, two brothers, allegedly could not agree as to whether or not to include cigarettes in their assortment during the early 60s. Since then, they have not only divided Germany between them, but also their foreign operations.

Thus the fiefdom of Aldi South extends beyond southern Germany to Australia, Austria (under the Hofer banner), Hungary, Ireland, Slovenia, the UK and USA (cf. Aldi's Quits Greece & Aldi's Greek Fate).

From its power base in northern Germany, Aldi Nord has exported its concept to Belgium, Denmark, France, Luxembourg, the Netherlands, Poland, Portugal, Spain and the USA (Trader Joe's).


Lebensmittel Zeitung with its online sisters (photo: LZ)
Lebensmittel Zeitung with its online sisters
Read in German: 'Titel' on page x of 
Lebensmittel Zeitung, no. 36, 06.09.2011, and 'Titel' on page y of Lebensmittel Zeitung, no. 37, 16.09.2011, by features desk manager Bernd Biehl & retail news editor Hans-Jürgen Schulz

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