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The New Aldi: Really? – A response to a previous BrandHook blog

June 4, 2015

The New Aldi: Really? – A response to a previous BrandHook blog

An office divided: the following blog was written around the same time as our previous blog post (Beating Competition By Meeting Customer Demands: Aldi’s New Inspiration) by a different BrandHook author. It presents an extremely different (and contrary) point of view on Aldi’s new approach – which side of the Aldi fence are you on? 

Since I arrived in Australia in 2014, the majority of my experiences have been absolutely great… but one of my biggest Australian disappointments must have been paying the cashier at the supermarket after that first weekly shop. Over and over again I was amazed at just how expensive the groceries are here in this otherwise wonderful country (and don’t get me started on alcohol…).

So once we had found a nice house to live in, we noticed that our nearest supermarket was an Aldi. I had no reasons not to go, so to Aldi I went. My end conclusion: the price difference is definitely worth walking through an ugly store. You might say I have actually grown into a bit of an Aldi promoter.

But the times they are-a changin’ in the world of Aldi. About 2 months ago, Aldi launched 4 new concept stores. In short, the new stores provide customers a broader offer of fresh & baked produce, along with improved product displays, lighting & layout. All in all, it’s quite a different supermarket compared to ‘my old Aldi’ around the corner.

Aldi explains the new strategy by referring to Nielsen’s 2014 Homescan Report, which shows that:

  • 30% of their customers were now ‘low-income shoppers’
  • 34.4% were from ‘middle-income households’
  • the remaining 35.6% consist of ‘high-income households’ (incomes greater than AUD$90,000 a year) – a segment which has grown by 6.7% since 2011.

Because a majority of the customers now come from the higher income households and the 6.7% figure is the highest growth rate of any supermarket retailer, Aldi decided to launch the new stores as a means of appealing to (and cornering) this group. Now, in light of the above numbers, I totally understand that Aldi wants to embrace this group and push those numbers higher still. However…

I believe that the strong distinction between the Aldi stores and its competitor’s stores (Woolworths and Coles) is a huge asset. Aldi is known as the price fighter and the look & feel of the Aldi stores fit their price range perfectly… I would not be surprised if their stores even have a ‘halo’ effect where the price benefit ‘feels’ better than it actually is because of the store’s ‘rough spun’ appearance.

To me, an upscaling to be more like Coles/Woolies ‘blurs’ the distinction between the competition and really feeds the expectation (well, my expectation at least) that prices will increase as a result. And that undermines an important reason why I go to Aldi in the first place.

It’s also not just about the $$$’s. I actually like going to Aldi. I love the fact that the store is not that big and the offer is not that broad. I know my way around, I’m not fretting over choice for too long and I get what I need without too many temptations. The end result: I shop twice as fast, which I love.

Furthermore, I think those atypical weekly sales at Aldi are just fab. They are surprising and funny, and are a nice break from the standard (boring) grocery shopping experience. Last year they even had a Dutch week, so all of a sudden my house was filled with our favourite Dutch cookies, spreads, smoked sausages… everyone loved me!

It is that total package experience that I like and it’s something that Woolies and/or Coles are not offering. So nope, no need to upgrade the Aldi store. I will not say no to a few product tweaks here and there but I just hope they leave ‘my Aldi’ alone.

I would like to know if Aldi’s new strategy has incorporated more than the numbers. Have they spoken to their customers to get an in-depth understanding of their shopping habits, their wishes and needs? Have they also thought about their lower income customers (30% is still a big portion)? Instead of moving closer to their competitors was there no other way to appeal to the higher incomes (without losing their once-unique strengths)?

I hope I am not being too pessimistic in all of this. I know I sound like a jilted lover but I really do wish “my Aldi” all the best! Will these new moves pay off? Only time will tell.


Foreword: The following is a guest blog written by Dave Ansett from our obscenely creative friends over at Truly Deeply. For the original blog and/or more information on their agency, check out their website here. Where’s The Brand Loyalty Gone? Consumer research tells us that brand loyalty is diminishing at a rapid rate. 78% of western consumers Continue reading

There is a growing need to produce excitement and inspiration, regardless of brand, industry or market. Consumers are constantly demanding more from their stores, and stores are under increasing pressure just to keep up. In this climate, it is no longer enough for a brand to merely offer the “industry-standard”, B+ kind of service you’d Continue reading

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