Consumer perception of Aldi has fundamentally shifted and it has finally been accepted as a mainstream UK grocer, managing director Paul Foley believes.
Speaking to Retail Week, Foley said: “We have reached our tipping point. We are convinced if we open in a new location, people would automatically try us. There is more good news about us now than the old scepticism.”
Aldi, which entered the UK in 1990, suffered from negative perceptions in the past, Foley admitted. Consumers saw the grocer as “a retailer of cheap packets and tins”, he said.
However, it is now generating unprecedented market share gains as hard-pressed shoppers try out the stores and are impressed by what they find.
He said: “Any negative word of mouth has disappeared because customers are trying us and having a good experience. We have achieved the tipping point because of the huge level of advocacy we have built up.”
Foley was loath to draw comparisons between Aldi and other low-price retailers such as Primark, which have also enjoyed a boom on the high street.
He said: “Some people try to compare us to car brands that have turned themselves around, but every business is different. The more established we are, the more we can project our USP.”
According to an exclusive ICM poll for Retail Week, most people (58 per cent) say they would be pleased if a discount grocer opened on a high street near them, including almost a third (30 per cent) who say they would be very pleased.
IGD senior business analyst Gavin Rothwell said Aldi has worked hard to break down negative perceptions. “Aldi has been working on developing the quality aspect of its proposition and this is clearly paying off, which is shown by its increase in market share and its ability to attract more ABC1 shoppers,” he said.
Rothwell added: “Aldi does have more mainstream appeal than it did when it arrived. It has put a lot of effort into its premium ranges such as beef wellington and king prawns, which are all aspirational products but at a clear value price point.”
The ICM poll also revealed that the majority of consumers (60 per cent) believe people will continue shopping at discounters even when economic conditions improve, a view that is consistent across all demographic groups.
“The discount concept is likely to become more popular and more competitive,” said Foley. “Then it comes down to who is best at it.”