Aldi- THE GERMAN WALMART

Albrecht Discounts
SHOP ALDI SMART
 Aldi Süd Aldi Nord
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Aldi logo

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•Aldi, short for Albrecht Discounts, is actually two companies, Aldi Sud and Aldi Nord.
Started in Essen,Germany after world war II.

•Aldi offer the basic necessities through its grocery stores.

•
•By the early 21st century, Aldi had global presence through its 7000 stores.

•Aldi Süd manages expansion in English speaking countries and Austria, which borders

its operations in Southern Germany.

•Aldi Nord manages expansion in the rest of Europe as well as Northern Germany.

•The divisions were run by the Albrecht brothers Karl (Sud) and Theo (Nord) until 2003.
 “Our unique way of
operating makes
Business
it virtually impossible
for competitors
to match our combination
Model
of price and quality.”

“our unique way of operating makes it virtually impossible for competitors to

match our combination of price and quality.”
 Product

l Aldi stock 70 to 1000 products.

l Each product category has only one brand
& a restricted variety.
l Only 15% are the national brands rest are
private labels.
l No compromise with the quality & PL are
as good as the established brands.
l Private labels are produced by well-known
brand manufacturers.(Eg.Kellogg)
• PL :Millville,Casa Mamita,Snack
Rite,Schoko Chips,Schoco Flakes
l Limited products, stronger control on the
quality & price.
l Limited products also eases shipping &
handling.
l Surprise buy
l
 Price

LESS IS MORE FOR ALDI

“We sell at the lowest possible price,”

•Aldi was managed solely on the basis of lowest price.

•Act as a hard discounter .

•Aldi sell its product at the price 30% lower that of the national brands.

•Provides and target people who seeks value for money.

•Aldi is able to keep low prices bcoz it buys in bulk , & cut in store cost.

Save warehousing cost., remain close on sunday and bank holidays,expansion

with its cash flow.

•No frills, no aisle decoration.

 Place

•Aldi stores are generally 15000 sqft.

•Aldi’s product variety is limited ,customers spend less time to pick

up their merchandising and thus keeping the movement easy and

quick.

•Keeping the store small also make the choice of a site easy.

•Aldi generally leases or buys the stores that have capacity less

than required to get a presence in a particular market.

 Promotion

•Aldi spends minimum on marketing and advertising i.e., less

than 0.5% of its annual turnover.

•Aldi has traditionally relied on catalogues, local press

advertising and web updates to generate word of mouth.

•Aldi used two page color advertising particularly in local

suburban give-away newspapers.

•They have also delivered the full color leaflet used in store

to householders' letterboxes in store localities.

•As of June 2009, they have started a television commercial

campaign advertising Aldi's slogan "Smarter Shopping"

•
 Aldi store characteristics
l Both Aldi companies operate with the
• same limited assortment, private label
• strategy.
l A typical store is about 15,000 sq. ft.
• (1,000-1,500 sq. m.) with as few as 700
• products and as much as 95% of it
• private label.
l Aldi’s well-developed private label skill
• has created a competitive advantage
• with a combination of low prices at a
• high standard of quality.
 Aldi SWOT Analysis
Strength
Simple consumer proposition
•
based on price.
• Procurement, range management
and logistics.
• Low cost base.
• In-store availability.
• Strong domestic position.
• Decentralized structure.
• Portfolio modernization
Opportunities
Global sourcing.
• Lost international first-mover
• US expansion.
• European expansion and new
market entries.
• Range adaptation.
• Relationships with branded
manufacturers.
• Develop town centre offering
Weaknesses
Remains niche player in many
•
overseas markets.
• Domestic performance.
• Adaptability of Aldi Nord vs. that
of Aldi Süd.
• Reliance on one format in majority
of markets.
• Excess non-food stock.
• Limited range of SKUs.
• Customer service
Threats
•
advantage to Lidl.
• Price competition.
• Other global retailers’ discount
formats.
• Soft discounters.
• Retailer consolidation.
• Changing demographics
FAST CHECKOUT
l Sells only about 700 high volume products.
•

l Sells mostly store brands for maximum control & safety.

•

l Thinly staffed stores, non-union workers.

•

l Minimal advertising, zero public relation.

•

l Expansion financed from cash flow, very low debt.

•

l Small stores format makes it easy to find sites.

l
Impact bigger than Wal-Mart?

l In ways, Aldi impact on the

• marketplace, notably on suppliers, may
• be bigger than Wal-Mart.
•

l Their impact is multiplied because of

• their focus on so few sku’s – 700 to 1,200 –
compared with 28,000 to
• 125,000 sku’s for Wal-Mart’s various formats.
•

l That means that Aldi and purchasing power per

sku can be several times that of Wal-Mart.
•

l As a result, in certain sku’s, Aldi can eclipse

Wal-Mart’s ability to squeeze suppliers and
cut prices.
Characteristics of a hard
discounter

•Low price own label

•Flexible small store format.

•High %age margin.

•Hard discounters like to buy centrally with the

bigger Manufacturer.

•Hard discounters conduct weekly competitor

pricing audits for being are of competitors pricing
and assortments.

•
 Hard Discounter(aldi) vs Discounter(walmart)
Comparables Aldi Wal-mart
Coupon
• Does not accept coupon Accept coupon at its face value

Loyalty cars
• None None
store brands
• 90% of product are pl 1650 private labels like Equate
Sam’s choice and Great value

Senior discount
• No No
B1G1 promotion
• Does not offer this promotion Does not offer this promotion.

Store hours
• Mon-thu,sat:9am-7pm Open 24 hrs
Fri:9am-8pm
Free coffee
• No Depends on store
Scanner error
• No yes
Store amenities
• Do not accept checks or coupons and Accept checks and coupons
they charge for bags unless you
bring your own.

Is the price pre unit market on the

• Yes Yes
shelf?
What product or service attract Every day super low prices Pl products are extremely popular.
people to your store?
ZONE MODEL OF
DIFFERENTIATION EARLY
RECOGNITION ZONE

PROFILING ZONE

SECURITY ZONE
SHOP
LOCATION STAFF

SHOP GOALS TECHNOLOGY

LAYOUT
Customer satisfaction
Customer interest
PRICE Customer loyalty SERVICES

ASSORTMENT ADVERTISING
• “ In Conclusion we would like to leave you with a
Question”
•

• Do you think Aldi will survive in the long run

with its strategies?

THANK YOU !

NAVEEN AND
PREETI