Branded invasion at Aldi
30 November 2016
Not a subscriber? Subscribe here.
Aldi are looking in good shape for Christmas to be fair; a real premium affair and this suits them well with their core focus these days - that is pushing premium along.
The value proposition remains in place though; with low prices and the simple pricing architecture for customers, however Aldi are running the risk of cluttering their offer too much with the sheer level of ranges.
Fresh Foods has gained an integral chiller for example at the head of the special buys. Up near the back of the store near the wider chilled range.
It now features food to go lines as part of their widening of the offer, of course these lines were already dropped into their fresh range but Aldi have expanded the range slightly and merchandised in a separate chiller unit.
All very nice and part of their push in 2017 to smarten up some stores for their 'future'.
The food to go move is bizarre though.
Firstly there was ample chiller space to acomodate the food to go range within the wider chilled assortment. However Aldi have been adding range across all chilled categories which has reduced space available, thus its been re-located.
Perhaps with one eye on Christmas to add in their fresh range, the use of this integral chiller does free up some space.
Secondly, the most bizarre aspect is that the chiller is right at the back of the store. Why would a customer in the store for food to go travel to the back of the shop? These customers are typically hard pressed for time and want to be 'in and out'.
Unless Aldi want people to add food to go to their core shop of course, rather than a specific 'to go' mission.
Also people aren't going to want to queue for their sandwich and drink behind 3/4 full trolley shops, relying on customer goodwill to let them ahead to purchase first.
Until Aldi put in some self service checkouts, this looks like an odd move at scale. It also raises questions about just how much their chilled range must have increased too.
It wasn't so long back they added further chill space in Produce and Meat, meaning they had more than enough room. Now if you walk down ready meals, there's nearly 3 bays worth of lines with premium extensions everywhere.
Lidl on the other hand have an element of discipline with their layouts, clearer to see for customers. Aldi planograms are very difficult to follow and incredibly cluttered, whilst the prices are low - it's a confusing shop in many respects.
In this expanded store; it was noteworthy to see the space swaps that have taken place. The Aldi preference is now to place Produce at the front of the store, first in the flow.
Therefore traditional categories like Cereals and hot beverages have both moved up the flow and also the space has reduced.
In core Tea, the challenge that Aldi are facing is laid bare - they've got more branded tea than own label in the core range. A big challenge for Aldi to 'row back' from this position, they have conditioned shoppers to low prices and high quality own label lines, but added branded lines in to appeal to newer shoppers.
There is a tipping point though where the branded lines become too much, Tea and Coffee are perhaps good examples of where the balance has tipped too far the other way.
Spreads and Preserves are sited on the end of the aisle and the space looks to have been cut down here too. Just one bay for spreads with another decent branded presence.
Nutella and Marmite are perhaps justified inclusions for leading brands, given the difficulty of replicating their taste in an own label line.
There is a lot of choice here in a confined space which could put availability at risk, or encourage in day replenishment (expensive to do). Also notable here that Aldi have a presence in all 3 tiers (good, better and best) within one bay.....
This looks to be the next Aldi wine fixture, really not convinced it's the right way to go here.
The Lidl with darker wood and smart signage looks the part, whereas this Aldi one looks a little like a display you'd find in your local Wine emporium / corner shop.
It cheapens the effect of their excellent Wines range, so back to the drawing board here for me.
The branded additional lines in Confectionery has now extended to the Cadbury's stable with a number of their lines ranged in store.
This in addition to Haribo (perhaps fair enough given the difficulty of replicating their products) but also Mars who were able to add Maltesers and Galaxy chocolate to the range recently.
Thus driving more lines into this range, with the prices keen (I'm sure, and no deals either) but it does have the impression of cluttering the fixture, thus making is hard for value to cut through.
Also the business has done a great job of telling customers that their Titan bars are equivalent to the Mars bars but without the price premium.
To then range Mars bars appears to be entirely at odds with this....
The rationale is interesting, expansion in home baking is understandable to an extent given the increase in bake off activity and interest. However Aldi can't authoritatively do the home baking range justice with their reduced space, so drive too many lines in and confuse the message.
The prices are good in home baking and indeed these other ranges but the message becomes entirely confused. In addition, if the efficiency levels are impacted then it will have a knock on effect for the chain.
With falling margins, inflation and real competitive pressure means that the outlook is tougher for discount that it was previously, The Tesco recovery would always impact everyone given their size, but it looks to have given discount a real bloody nose - particularly the farm / fresh food brands.
Aldi adding range and in particular a swathe of branded lines probably raises more questions than it answers.....
Email forwarded? Click here to request a service trial.
From the Grocery Insight newsletter archive, first sent to subscribers on 30 November 2016. Steve now writes at read.groceryinsight.com. See also the blog archive and briefings.