Aldi today reported a 41% rocket in sales in 2012 after it stole more than 1 million shoppers from rivals last year. Retail Week takes a look at the elements of Aldi’s offer turning heads.
Shoppers remain strapped for cash and every indication so far is that, even if belts are loosened, customers will continue to hunt down value products. Aldi’s offer of affordable discount brands and low-priced staple items has lured shoppers. Aldi claims it is extending its price gap against the big four, which is estimated to be between 20% and 25% per basket at present.
Tesco, Morrisons and Asda all lost share in the 12 weeks to September 15, according to Kantar Worldpanel. Aldi’s sales jumped 32.7% over the same period, bringing its market share to 3.7%. Sales of its Specially Selected range increased 40% in the last year and the line doubled in size as shoppers sought affordable groceries.
Aldi has invested in broadening its offer and improving quality over the last year. The grocer has shrugged off damage to its reputation caused by the horse meat scandal to continue to grow sales. Aldi said a focus on British sourcing, notably on meat, milk and eggs, had driven growth in 2012, and last Christmas it introduced free range purebred turkeys. It has also begun selling lobster to attract upmarket custom.
Its ‘Like Brands. Only Cheaper’ TV adverts (see below) have won shoppers’ hearts and clearly communicate Aldi’s offer compared with upmarket retailers such as Fortnum & Mason and Harvey Nichols. It also launched a campaign focused on British sourcing of beef following the horse meat crisis.
4. New stores
Aldi has rapidly grown its presence across the UK in recent years and built on this last year. The discounter invested £116.5m to open 34 stores during the year and plans to open 100 new stores across the remainder of this year and 2014. It is poised to open its 500th store in Bury St Edmunds on October 31. Good, accessible locations remain key for grocers, and Aldi’s smaller format store piloted in Kilburn may be able to tap into the rapid growth experienced in convenience grocery in recent years. It has no plans to launch online grocery at present.
5. Bigger baskets
Aldi has deliberately broadened its offer to allow customers to conduct a full weekly shop at the grocer. Data from Nielsen Homescan for the 12 weeks to August 17 showed Aldi’s average core grocery basket spend is now £18.63 while its average size is 16 to 17 products – just below Morrisons and Sainsbury’s which stock a far broader range. However, Aldi is still used by many consumers as a top-up or complementary shop. Asda has moved to block its customers seeking out Aldi by lowering the price on key lines.
Aldi’s eclectic mix of short-term promotions, from DIY products to cycling accessories, remain a firm favourite with shoppers who enjoy the serendipity of its ‘when it’s gone, it’s gone’ deals. In food, its Super 6 fortnightly fresh produce deals regularly rank in Aldi’s top-performing lines.