The colossus discount German ALDI – in celebrating its first 5 years of success in Italy in Milan – presents a development plan that includes increasing the number of stores in the north of the country and internationalizing the made in Italy in eleven of the countries where the group operates globally.
Discounters in Italy have captured one-third of the retail market share. And their growth continues in spite of inflation, which, according to Nielsen data, in the low-price segment has reportedly reached peaks of 20 percent (double that recorded in supermarkets).
1) ‘ALDI price’ and ‘private labels‘, the recipe of the German discounter
‘Inflation is everyone’s problem with which we also have to measureourselves,’ explains ALDI Italy country managing director Michael Gscheidlinger. ‘We have decided to hold firm to our ‘ALDI price,’ that is, the policy of best value for money in the market.’ How? ‘Absorbing cost increases by reducing margins, but also byoptimizing processes and resources. For example, we replaced all glass packaging with recycled plastic packaging, while maintaining the quality of the product‘.
Private label is the second ingredient in the ALDI formula and expresses about 80 percent of the supply. With different product lines such as, for example, in the food department, ‘The Colors of Flavor‘ (fresh fruit and vegetables), ‘Region You Go,’ ‘Bio Natura,’ ‘Il Podere. The assortment is full of PDO and PGI products made in Italy, from Lagorai cheese from the Province of Trento to bresaola from Valtellina PGI and burrata di Andria PGI, also private label. Rather than producer-branded Grana Padano PDO such as. All of them, ça va sans dir, at ‘ALDI price‘.
2) ALDI, the German giant’s expansion plan in Italy.
ALDI’s expansion plan in Italy, Michael Gscheidlinger continues, will take place in two phases.
2.1) First phase
The first phase of ALDI Italy’s development integrates human resources, organic food offerings and digitalization:
– recruitment of 200 employees,
– Implementation of the organic assortment,
– introduction of digital etiquette and speeding up checkout operations, now one of the company’s weak points, including through new automated checkouts,
– Customer retention and digitization of offers via Whatsapp.
2.2) Second phase
The second phase will be devoted to opening new stores, starting with Seveso (Monza Brianza, Lombardy). With the prospect of increasing the ubiquity of distribution of ALDI discounters (already 160 now) in northern Italy. Southern Italy vice versa is unfortunately, for the time being, outside the German giant’s plans for growth.
The expansion will be accompanied by opening up to new suppliers of made-in-Italy products. With this in mind, ALDI participated in the formidable 2023 edition of TuttoFood in Rho Milano Fiera and plans to participate in Marca, in Bologna, in January 2024. As well as other international fairs.
3) Growing Organic
ALDI Italy’s organic department now includes 130 references-4.3 percent, out of a total of about 3,000-and boasts significant growth prospects. Also and precisely in the discount sector, under the banner of the ‘democratization of organic’ that this site has been calling for for years and is finally coming to fruition.
‘We manage to contain the cost increase that the market has experienced especially in the organic department, partly due to the strong relationships with our suppliers that we tend to reiterate through annual tenders.’
Aldi’s organic suppliers include some major Italian companies such as Agribologna, Spreafico, Cultiva, and Santacroce for PGI Tropea onions.
4) Prospects for suppliers of made-in-Italy products.
‘ALDI is always open to welcoming new suppliers who adhere to its values and standards. We already work with leading manufacturers of made-in-Italy foods, not only in fresh.
The advantage of joining ALDI’s list of suppliers is the possibility of operating within an international network of stores where made-in-Italy food excellence is increasingly in demand. (1)
Through our logistics platforms, we can facilitate the internationalization process of the country’s companies by ensuring that their products are placed in a premium price segment‘ (Bernadette Huber, ALDI Italy, purchasing director).
5) Consumer preferences
During the press tour, the results of a market research conducted by AstraRicerche on behalf of Aldi in April 2023 on a sample of more than 1,000 respondents aged 18-65 were disclosed.
According to the study, food departments are the ones where customers spend the most time.
5.1) Discount stores increasingly resemble supermarkets
‘The data show us that visitation patterns in our stores do not differ much from those in supermarkets. This is probably because the discount store formats of thirty years ago no longer exist today, and stores provide a shopping experience very similar to that of the supermarket in terms of depth of assortment and organization of store space and design.
‘The frozen food aisle marks an overtaking over supermarkets because it is more frequented by 3.2 percent of consumers, 6 percent of the total discount stores, versus 1.9 percent of supermarkets,’ explains Cosimo Finzi, director of AstraRicerche.
5.2) The most attractive elements.
Among the most attractive elements of the store prevail
- the indications of offers/promotions (55.3%),
- price tags (49.8 percent),
- order and cleanliness (39.1%),
- The arrangement of products (35.4%),
- The presence of short-term theme area such as theme weeks (18.2 percent).
Data on store format increasingly bring consumer perceptions of discounters closer to those of supermarkets since the indications of various departments/products are considered attractive by 14.% of the sample for discounters and 18.7% in supermarkets. The same is true for the presence of staff and caregivers (13.9 percent and 18.4 percent) and the presence of
promoters
(4,2% e 6,2%).
5.3)Ecommerce is far away
An internal analysis of Aldi on its customer base recorded that consumers’ shopping experience mainly rewards pleasant colors of the stores, clear signs on the walls, background music, correct temperature, and deep assortment, which scored 7.8 on a scale of one to 10.
Low prices, which are the beating heart of the discounter‘s policy, do not, however, make it yet sustainable to start an Aldi ecommerce platform.
Mariangela Latella
Notes
(1) ALDI is now the fourth largest retailer globally-after Walmart, Amazon, Schwarz-with 130.4 trillion in sales. V. https://nrf.com/blog/look-2023-top-50-global-retailers
Professional journalist since January 1995, he has worked for newspapers (Il Messaggero, Paese Sera, La Stampa) and periodicals (NumeroUno, Il Salvagente). She is the author of journalistic surveys on food, she has published the book "Reading labels to know what we eat".
