ALDI 2015: Radically Transforming Anglo Saxon Grocery Markets
Release date: February 11th, 2015 (174 pages)
PDF/Powerpoint format. Price: GBP1,990.00
ALDI KEY QUESTIONS ANSWERED
What are the sales figures for Aldi’s international and domestic businesses? Which of Aldi Sued or Aldi Nord is bigger? How many stores does Aldi operate?
What are Aldi’s sales densities and KPIs per country? What about the profit margins?
Which markets promise the best returns for both Aldi Sued and Nord and which criteria need to be fulfilled for the discounters to open their distribution centres and stores?
What sales levels will Aldi achieve over the next 5 years? Lidl is the biggest EU retailer already, where will Aldi end up in future?
How are Aldi Sued and Nord performing in their home market of Germany? What learnings can be taken from the domestic market and what counter strategies replicated?
What market share can Aldi reach in the UK? What does the retailer have to do now, to maintain growth rates of more than 30% year on year?
How has Aldi captured the hearts of the Australian shopper? Could it threaten the Coles/Woolworths duopoly?
What is Aldi Sued’s strategy in the US market? How does Aldi Nord owned Trader Joe’s differ from other grocers and why has it developed a cult-like following?
Why does France pose a difficulty for Aldi and fellow discounters? Why is Aldi Nord struggling in Denmark?
GENERAL BACKGROUND AND THE NEED FOR CHANGE
How is the Aldi Group structured and run? What are the key differences between Aldi Sued and Aldi Nord? How does the discounter model work? Why is Aldi so successful at it?
How successful is Aldi with its move away from EDLP towards gentle promotions and a new good/better/best approach to its private label proposition?
What is Aldi Sourcing Asia Limited? Is it the first step to full vertical integration?
How promising are the latest big data approaches at Aldi?
Why is the discounter changing now? What is the strategy evolving to now?
STORE EXPANSION AND FORMAT STRATEGY
How do Aldi Sued’s and Aldi Nord’s store expansion strategy differ?
Will and should Aldi expand into China?
What is the significance of Aldi’s Kilburn store in the UK? Or the store on Duesseldorf’s Koenigsallee?
Why has Aldi Sued teamed up with upmarket rival Rewe and dm in site location in Germany? What are the consequences of this agreement? Who feels the impact? Is this a model for other markets? Is something similar at play in the US?
In what ways is Aldi standardising its business model?
In which markets is Aldi Sued investing going forward?
Filling in opportunities around existing infrastructure have trumped expansion into new territories for now, will this change any time soon – and where?
How much money is earmarked for expansion into Anglo Saxon markets? What emergency cash facilities is the discounter holding back for eventual price wars and foreign expansion?
BRANDS IN DISCOUNTERS
In which markets does Aldi see most potential for the introduction of FMCG A brands and in which will private label remain the main focus?
How much of Aldi’s range is local and its sourcing influenced by the respective store manager? How big is Aldi’s global range?
Is Aldi due to its limited range assortment and SKU count still the biggest global buyer ahead of Wal-Mart?
What are the average sales per SKU per country? How high are sales densities in the countries the discounter operates in?
What is the potential for FMCG A brands at Aldi? What is the brands percentage of the total range at Aldi Sued and at Aldi Nord now? Where can it go? Where will Aldi draw the line?
What are the learnings from Lidl and the more distant past in regards to the introduction of brands? What are the dangers and risks of a ‘brands in discounters’ strategy?
Does the 80/20 rule to SKUs sales apply at Aldi, what lines underperform?
What percentage of SKUs in Aldi consists of brands? Do brands enhance or damage the discounter model? For brands, does listing in discounters enhance or damage reputation? What is the effect on basket size and shopper recruitment? What about general pricing levels?
What does the listing of Coca-Cola in the discounters teach us about the introduction of brands in discounters? Which other FMCG A brands have entered Aldi? Which have declined?
What happened to pricing levels of both Coke and crucially Pepsi after the permanent listing with Aldi? What happened at Lidl?
Was the introduction a success? From both partners’ perspectives (Aldi and Coke)?
Will the migration to online grocery threaten Aldi? Should Aldi make the leap into e-commerce? How has rival discounter Dia been innovative in this area?
Table of contents
|Introduction: the concept||p19|
|Concept: Product centricity, relentless process optimisation||p20|
|Concept: Modernising one single format, internationalisation, buying power||p21|
|Concept: Adaptability and the online opportunity||p22|
|Concept: Aldi Sued expansion||p23|
|A winning format: The Discounter – success factors||p24|
|The context: EU Grocery Retailing in 2014||p25|
|Grocery sizes: EU 27, 2009-2013 in ‘000 €bn, e||p26|
|Grocery sizes: Shoppers cut back, shop around and go to hard discounters||p27|
|Grocery sizes: EU 27, 2008-2013 growth in %||p28|
|Grocery sizes: EU 27 growth 2008-13 in %||p29|
|Grocery per capita sizes: EU 27 in 2013 in €, from Finland to Bulgaria||p30|
|Hard discounters: Aldi Sued and Nord||p31|
|Aldi: A completely underestimated business model||p32|
|Aldi: Simplicity, simplicity, simplicity – fine tuning a single format over decades||p33|
|Aldi: Lean SKU count means bigger buying power than Wal-Mart||p34|
|Aldi: Supplier relationships and the quality focus||p35|
|Aldi: Efficient layout and product presentation and the all important SKU count||p36|
|Recent developments: Aldi in 2014||p37|
|January 2014: Christmas growth boost, fishing for clarity||p38|
|March 2014: Misleading campaigns, modernising retail technology||p39|
|April 2014: Majorca, California, management restructure in AUS, UK job creation||p40|
|June 2014: DC in UK, Hofer’s harmonised traceability, San Diego||p41|
|July 2014: Death of co-founder, German smartphone launch, school uniform||p42|
|August 2014: UK smartphone launch, is it a good idea?||p43|
|September 2014: Price warning to rivals, credit card ban lifted in England||p44|
|October 2014: Caviar controversy and organic produce in the UK||p45|
|October 2014: Good news in Spain and Australia, bad news in Denmark||p46|
|November 2014: UK Christmas ad, tackling China and American expansion||p47|
|November 2014: Management shuffle and job creation in the UK, New Zealand?||p48|
|November 2014: New Zealand?, organic range in Switzerland||p49|
|December 2014: UK developments, credit cards in US||p50|
|December 2014: Entering the Basque region, Irish expansion, telecom in Austria||p51|
|January 2015: UK – Salmonella, Swap and Save, healthy tills||p52|
|Financials and KPIs: Aldi in 2014||p53|
|Aldi: The original – split into two, an organising principle to manage complexity||p54|
|Aldi: Figures 2010 - 14, international contributions more important than domestic||p55|
|Aldi: Benchmarks, sales densities, Sued ahead of Nord||p56|
|Aldi: A word on Aldi’s profits and margins||p57|
|Aldi: the store estate, rapid internationalisation||p58|
|Aldi: 10,000 stores, more international openings to come||p59|
|Aldi: the domestic market||p60|
|Aldi: €2.0bn more generated in sales in the last two years in Germany||p61|
|Aldi: Germany, data, benchmarks, reaching saturation||p62|
|Aldi: Germany, tweaking the store network, organic ranges, convenience||p63|
|Aldi: Germany, organic, in store bakeries, internationalisation||p64|
|Aldi: Exporting a modus operandi, the direct comparison to the competition||p65|
|Aldi: Aldi Nord relaunching its fresh offer in Germany and NL in 2014||p66|
|Aldi: Integrated concept with ad push and special placements||p67|
|Aldi: Targeting vegetarians||p68|
|Aldi Sued: Giving away free Panini stickers – a farewell to the pure doctrine?||p69|
|Aldi Sued: First tentative steps into big data – another departure||p70|
|Aldi Sued: Following Lidl’s lead on data warehousing once again||p71|
|Aldi Sued: foreign markets||p72|
|Aldi Sued: Countries, benchmarks, sales, stores, sales densities||p73|
|Aldi: 2013, sales per country in €m, market shares of total grocery universe in %||p74|
|UK: Brief history and recent 2014 figures||p76|
|UK: Aldi winning the price war||p77|
|UK: Creating headaches for big four, shoppers shaping strategy||p78|
|UK: Diversifying range||p79|
|UK: Low price and simplicity winning over customers||p80|
|UK: Investment spree, store opening plans, job creation, convenience stores||p81|
|UK: Two new DCs to support 60 new stores, widening of the store footprint||p82|
|UK: Suppliers and infrastructure simply cannot keep up with 30% growth||p83|
|UK: Challenges, continuing to steal market share, to be bigger than Waitrose?||p84|
|UK: Do Aldi and technology mix well?||p85|
|Aldi Sued: Australia, not as price aggressive as elsewhere||p88|
|Australia: Customers embracing Aldi, challenging the duopoly||p89|
|Australia: Aldi takes on Coles and Woolworths||p90|
|Australia: Still work to do, Aldi’s positioning in the grocery market.||p91|
|US: Aldi Sued – a rising force in US grocery, operates from coast to coast||p93|
|Aldi: USA, investing $3.0bn, simply living, merger creating a threat?||p94|
|Aldi: USA, shift from entering new markets to saturating existing markets||p95|
|Aldi: Switzerland – market entry lowering price points of the entire retail universe||p97|
|Aldi and Lidl: Switzerland – the discount grocery market scene||p98|
|Aldi: Switzerland, extension of organic range||p99|
|Aldi Nord: foreign markets||p100|
|Aldi Nord: Countries, benchmarks, sales, stores, sales densities||p101|
|Aldi Nord: 2013, sales per country in €m, market shares of total grocery universe in %||p102|
|US: Aldi Nord – Trader Joe – highest sales density in the USA||p104|
|US: Aldi Nord – Trader Joe’s innovative take on grocery (I)||p105|
|US: Aldi Nord – Trader Joe’s innovative take on grocery (II)||p106|
|France: The anomaly, buying groups to counter the price war||p108|
|France: Margin compression, launching coffee capsuless||p109|
|Aldi Nord: Spain, expansion into Majorca||p111|
|Aldi: strategy section||p112|
|Aldi: Staying offline, apart from wines in AUS, but for how much longer?||p113|
|Dia: The first discounter to launch a click & collect service||p114|
|Dia: Cheaper than in store, faster than drives and €30 average baskets||p115|
|Dia: Catering to pedestrians, trial widened out, France only for now – now closed||p116|
|Aldi: location, format and expansion strategy||p117|
|Aldi: Store expansion strategies, Sued to fill in, Nord to modernise||p118|
|Aldi: China expansion – extremely unlikely for now||p119|
|Aldi: China – it’s not going to happen||p120|
|Aldi: China – more reasons to remain skeptical||p121|
|Aldi: Expansion financed out of cash flow, location choice criteria||p122|
|Format strategy: Aldi convenience, the Kilburn Store in London||p123|
|Format strategy: Aldi convenience, the opportunity in UK and Germany||p124|
|Aldi: teaming up with competitors||p125|
|Aldi Sued & Rewe: teaming up in Germany, creating destination status||p126|
|Aldi Sued & Rewe: From competition to cooperation||p127|
|Aldi: the back end strategy, logistics and vertical integration||p128|
|Aldi: Standardisation and internationalisation, exporting a success model||p129|
|Aldi: Logistics and the back end, standardisation and keeping it simple||p130|
|Strategy: Aldi Sourcing Asia Limited takes control of non-food sourcing||p131|
|Aldi: Sourcing strategy, tentative steps into vertical integration||p132|
|Aldi: from Quality Control to CSR||p133|
|Aldi: ranging strategy||p134|
|Aldi: Minimising complexity, keeping OSA simple, product centricity||p135|
|Aldi: Always the late second mover, only one can be the cheapest||p136|
|Actionable recommendations: learning from the hard discounters||p137|
|Aldi: brands in discounters||p138|
|Aldi: Average € per SKU per country in 2013, massive opportunity in DE and the US||p139|
|Aldi: Does the 80/20 principle apply at Aldi? Loss leaders, global synergies||p140|
|Aldi: Sued ahead on average SKU per store basis, how big is the global range in €?||p141|
|Brands in discounters: The introduction, a win-win or a clear threat to the model?||p142|
|Brands in discounters: Lidl, Edeka’s Netto, Aldi’s FMCG brands, Aldi Nord’s big opportunity||p143|
|Brands in discounters: 8 reasons to be skeptical – reverting to type, limited space||p144|
|Brands in discounters: 8 reasons to be skeptical – conservatism, cannibalisation||p145|
|Brands in discounters: 8 reasons to be skeptical – Lidl’s cut backs, organisational set up||p146|
|Brands in discounters: 8 reasons to be skeptical – strategic fit, the control issue||p147|
|Brands in discounters: what FMCG companies need to consider||p148|
|Brands in discounters: Questions from retailers, just a short term tactic, not a strategy?||p149|
|Brands in discounters: FMCG brands, price points and pack sizing?||p150|
|Brands in discounters: Lessons from Hofer Austria and Lidl Germany||p151|
|Brands in discounters: the Coke listing in Aldi in Germany||p152|
|Aldi: Coca-Cola listing in Aldi off to a great start, at moderate price||p153|
|Lidl: The Coca-Cola wars in Germany, delisting ... for a few days||p154|
|Lidl: Coke losing €150mn in sales through the boycott, Lidl losing shoppers||p155|
|Lidl: The Coca-Cola wars and Lidl’s warning to FMCG||p156|
|Aldi: Coca-Cola listing, 1.4m new households shopping the category||p157|
|Aldi: Coca-Cola listing in Aldi a clear success||p158|
|Brands in discounters: other case studies||p159|
|Aldi: l’Oreal says no to Aldi||p160|
|Aldi: Top spirits brands listed||p161|
|Aldi: Procter & Gamble lists in Aldi in Germany for the first time||p162|
|Aldi: P & G brands in standard range or just one off promotions?||p163|
|Aldi: following Lidl’s work on brands||p164|
|Aldi: Listing Jack Daniels just in time for Christmas||p165|
|Aldi: The verdict on listing brands – despite sales uplifts, only for the most powerful||p166|
|Outlook: and forecast||p167|
|Outlook: Improvements to be made in the UK, better non-food promotions||p168|
|Outlook: Will Aldi introduce more brands? Should it?||p169|
|Outlook: Will Aldi introduce more brands? Should it? Widening the range||p170|
|Outlook: Long term outlook, ease of expansion||p171|
|Outlook: UK outlook specifically, threat of online||p172|
|Chart 1: A winning format: The Discounter – success factors||p24|
|Charts 2 & 3: Grocery sizes: EU 27 2008-13 growth in %||p29|
|Charts 4 & 5: Grocery per capita sizes: EU 27 in 2013 in €, from Finland to Bulgaria||p30|
|Chart 6: Aldi: 2013, sales per country in €m, market shares of total grocery universe in %||p74|
|Chart 7: Aldi Nord: 2013, sales per country in €m, market shares of total grocery universe in %||p102|
|Chart 8: Actionable recommendations: learning from the hard discounters||p137|
|Table 1: Grocery sizes: EU 27, 2009-2013 in ‘000 €bn, e||p26|
|Table 2: Grocery sizes: EU 27, 2008-2013 growth in %||p28|
|Table 3: Aldi: Figures 2010 - 14, international contributions more important than domestic||p55|
|Table 4: Aldi: Benchmarks, sales densities, Sued ahead of Nord||p56|
|Table 5: Aldi: the store estate, rapid internationalisation||p58|
|Table 6: Aldi: Germany, data, benchmarks, reaching saturation||p62|
|Table 7: Aldi Sued: Countries, benchmarks, sales, stores, sales densities||p73|
|Table 8: Aldi: 2013, sales per country in €m, market shares of total grocery universe in %||p74|
|Table 9: Aldi Nord: Countries, benchmarks, sales, stores, sales densities||p101|
|Table 10: Aldi Nord: 2013, sales per country in €m, market shares of total grocery universe in %||p102|
|Tables 11 & 12: Aldi: Average € per SKU per country in 2013, massive opportunity in DE and the US||p139|