August 24, 2012

Aldi plans health & beauty offensive

Aldi health & beauty department (photo: Georg Lukas)
Pretty discounter: Aldi wants to dynamise its own label offer with top health & beauty brands
Macho Aldi is getting prettier as the cultural revolution at Germany's largest hard discounter gains pace.

According to trade sources, the Alpha males at the top are in advanced negotiations with suppliers to list top health & beauty brands.

To date, Aldi has generally had little time for brand magic and only stocks own label products in this category.

Talks are said to be furthest advanced with Beiersdorf, the maker of Nivea skin cream etc. Other frequently heard names include top brand manufacturers L'Oréal, Henkel, Procter & Gamble, Colgate and Nestlé. 

None of the parties concerned cared to comment on these rumours except for Nestlé who denies the reports. But the retail giant clearly wants to add more punch to its health & beauty assortment.

Young families

Greater competence in this segment would also make the company more attractive to young families, a key target group which has partially eluded Aldi in the past.

Parallel to this, the high-street multiple is clearly also thinking intensively about how to market its offer more aggressively. Apparently, it is seriously considering adding brands to its advertising for the first time in its long corporate history. Even TV spots are no longer taboo.

In view of Aldi's €25m annual revenues last year and its nearly 11 per cent share of German food retailing, this is big news for brand manufacturers.

Health & beauty suppliers are particularly interested at the moment because of Schlecker's recent bankruptcy. The closure of most of this drugstore discounter's immense store base has reduced sales volumes for some. Also, Aldi Group is successful in numerous European countries.

More brands

The new move is part of a general sea change at Aldi as it looks to embrace more brands. The first new listings occurred in the sweets category this spring.

Aldi, however, is a profoundly cautious animal and is carefully coordinating assortment changes within its two major divisions, Aldi Nord (Aldi North) and Aldi Süd (Aldi South). The no-frills retailers is also at pains not to devalue its existing own label offer.

Above all, Aldi Group is anxious to avoid the fate of arch-rival Lidl, whose recent attempt to extend its health & beauty assortment by including major brands, was ultimately unsuccessful.

Related article in German: Lebensmittel Zeitung, no. 34, 24.08.2012, by Hans-Jürgen Schulz, Bernd Biehl & Andreas Chwallek

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