German hard discounter Aldi Nord is about to embark on the biggest investment programme in its history, with plans to refurbish the entire European estate.
German hard discounter Aldi Nord is about to embark on the biggest investment programme in its history, with plans to refurbish the entire European estate. New concept stores, recently unveiled in Belgium and Denmark, will serve as the blueprint for the store design, and analysts estimate capital expenditure for the programme could amount to a high three-digit million euro sum.
Over the past three years, Aldi Nord has revised a large part of its product range. Recipes have been reviewed, packaging has been redesigned and new private brands have been developed.
The relaunch coincides with a raft of further new developments, including new employee uniforms, revamping the website and the roll-out of in-store bakery ovens across its German network.
Aldi Nord has also been experimenting with contemporary, bespoke architecture for new stores, particularly in Germany.
For many years Aldi Nord has been reproached for being too conservative, putting off any changes or investments. The retailer’s biggest issue has never been a problem with product quality, rather the public’s perception of its store ambience. It still enjoys a strong following in all its mature markets. However, turnover has become a growing concern. Sales have been stagnant, if not declining, over the past couple of years in the German domestic market. Even worse, the discounter is losing ground in its long-standing foreign markets. Instead, customers are increasingly turning to its fresher, more modern arch-rival, Lidl, in Aldi’s traditional strongholds of Belgium and the Netherlands.
Though some may argue the store revamps have come too late for Aldi, the last mover advantage allows the retailer to learn from its competitors’ mistakes and install the latest cutting-edge technology.
Aldi will also benefit from the sales improvements that often result from revamps. However, it is uncertain whether the store design will be enough to attract new shoppers.
For any outside observer who is familiar with retailers such as Whole Foods and Waitrose, the new stores have a less depressing ambience than before. One must not forget that functionality over aesthetics, focusing on efficiency and cost control, is what has made Aldi into a global grocer.
The move brings its unattractive store network on par with its fairly sophisticated product, establishing a more consistent and coherent corporate image.
- Aisling Balfe, Retail analyst, Planet Retail.
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