Aldi - Peak Carrot
3 December 2018
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Kevin the Carrot has worked ever so well for Aldi; it's so interesting to note that this is the 3rd year for our Vegetable based friend and arguably, the 3rd year with queues out of the door for a stuffed Carrot shows he's still going strong.
Arguably the performance over at Aldi is more impressive; given their continued run of strong sales, with a recent pick up at Kantar showing that the general UK populace is still in love with the discounter.
They are always strong heading in to Christmas and had the best premium range versus Lidl last year, Kantar sees a premium uptick once the range arrives so what else is going on in store?
First up - Kevin!
Early on Thursday a couple of weeks back, we braved the queues and headed to a local Aldi for Kevin and family. Driven by the kids I may add, however it was interesting to see the queues that had built up despite the early hour.
There were scenes elsewhere showing queues around the store itself, such is the captivation of Kevin and family, alongside Pascal the Parsnip and giant Kevin as well.
You have to tip your hat to them really; Aldi; for managing to continue the Kevin the Carrot fable and also generate real interest from customers.
Some of whom were just putting the Carrots on eBay, but nevertheless. Price points are also fair when you consider that it's £3.99 for a standard Kevin the Carrot and £19.99 for a giant one.
Compare that to the likes of John Lewis for previous campaigns of theirs where the toys have been minimum £9.99 and stock has been variable to say the least......
It's also interesting to see that as Aldi grow, the bigger suppliers are more inclined to work with them on popular toys, a big market for the discounters to move in to - as Tesco and Asda do a great job here, not to mention to Sainsbury's with Argos of course.
The Aldi headlines on Kantar recently have been all about the growth in premium, which is easily explained by the plethora of products that have appeared in the central aisle for Christmas.
Alongside the core premium ranges in confectionery, snacking and Christmas bakery lines - their premium(x2) range under the Exquisite range has re-appeared in the festive space too.
Their Mince Pies have perhaps peaked from that first year high of widespread sell outs but are still palatable. There are numerous products within this range, offering something a little more specialist alongside Chocolates paired with Wine and their Prosecco Panettone as well.
Specially selected is a key range for Aldi and this grows significantly in the central aisle for Christmas; the range arrives in late October and starts to sell well - prices are low and they've also reset price barometers (alongside quality) for premium as they have everywhere else.
Their confectionery range is strong and this is an area that remains brand dominant; despite their strong products, it is difficult for customers to gift the "Aldi Biscuits" necessarily, however these smaller products - flavoured Fudge, Chocolate Honeycomb etc are relatively niche and therefore work for customers.
There are a number of branded products in the wider Confectionery range from Aldi this year which caters for that mission.
As we can see; advent calendars are branded and sold from off fixture displays, this is happening more and more in discount. Unclear if FMCG suppliers are driving this or whether it's both parties collectively.
Certainly Lidl have been hard at work adding branded shippers to their offer on an ongoing basis too.
Kevin the Carrot - the king of Veg is flagged overhead on the Produce signage alongside award wins for Produce (2015-2018 winners).
Price is never far from the customer's mindset in Aldi as this is the primary reason for shopping with a discounter.
Given the movement in the market from Tesco particularly with their self deflation via the value brands and the price matching on these products via Aldi and Lidl...
We have seen price reductions from Tesco as Aldi reduce the price of equivalent products and then there becomes somewhat of a bun fight as prices on these entry products continue to be cut.
With Jack's also opening, Aldi have responded with numerous price cuts across the shop as they aim to maintain the price gap between themselves and competitors.
There are areas where they don't go any further, and reach the floor so to speak, but often they will just drop 2/3p more each time to retain the price leadership moniker.
I am unsure if this huge facing of Value Jam was related to the store and the demographic in which it was in (a difficult area of Leeds but a very busy shop) which saw Value Jam selling by the case load = so facings were increased to support availability.
Or whether it was a reaction to movement in the market?
Either way it was interesting to see just how much Jam / Marmalade from the Value tier that the store had on sale.
Ongoing interesting movements from Aldi in the UK market, they have the momentum once again, especially with customers seemingly tightening their belts post the hot Summer ahead of Christmas.
Certainly Aldi look well placed to pick up trade for Christmas, the question is, who loses?
Then, where do customers get their other bits and pieces from (branded Beers, Gifting, Toys, Turkey(?) etc).....
Still all to play for!
From the Grocery Insight newsletter archive, first sent to subscribers on 3 December 2018. Steve now writes at read.groceryinsight.com. See also the blog archive and briefings.