A story earlier this summer in Supermarket News reported on Aldi’s strategy and how the discount grocer is transforming itself into a serious competitor in the food retail industry. The author called Aldi a “powerful, perhaps underappreciated, disruptive force in a competitive marketplace.” Here are some examples of what Aldi has been doing.
- Expanding the product mix to include more high-margin, gross profit generators (packaged meats, produce, dairy and frozen products, seasonal merchandise)
- Leveraging total store merchandising (marketing a theme throughout the whole store rather than by department or category)
- Generating profit reserves for driving end-of-month traffic (reinvesting profits from the beginning of the month so they can drive traffic at the end of the month; end-of-month circulars include pages of hot-priced items)
The bottom line is that Aldi is successfully attracting more shoppers and increasing market share, which puts pressure on other grocers who are struggling with how to match Aldi’s low prices and expand services.