ALDI, 5 years of success in Italy and prospects for made in Italy

The giant  discount German ALDI – celebrating the first 5 years of success in Italy in Milan – presents a development plan that includes increasing stores in the North of the country and the internationalization of  Made in Italy in eleven countries where the group operates globally.

I discount in Italy have captured one third of the market share  retail. And their growth continues despite inflation which, according to Nielsen data, in the segment  low-price would have reached peaks of 20% (double that recorded in supermarkets).

1) ‘ALDI Price’ and ‘private labels’, the recipe of the  discount German

‘Inflation is a problem for everyone that we also have to face’, explains the  country managing director  of ALDI Italy Michael Gscheidlinger. ‘We have decided to keep our ‘ALDI price’, that is the policy of the best quality-price ratio on the market’. How? ‘Absorbing cost increases by reducing margins, but also thanks to theoptimization of processes and resources. For example, we have replaced all glass packaging with recycled plastic ones, maintaining the product quality unchanged’.

The  private label is the second ingredient of the ALDI formula and represents about 80% of the offer. With different product lines such as, for example, in the department  food, ‘The colors of flavor’ (fresh fruits and vegetables), ‘Region you go’, ‘Organic Nature’, ‘The Farm’. The assortment is rich in DOP and IGP products  Made in Italy, from Lagorai cheese of the Province of Trento to Valtellina IGP bresaola and Andria IGP burrata, always at  private label. Rather than Grana Padano DOP branded by the producer like. All,  it goes without saying, a ‘ALDI price’.

2) ALDI, the expansion plan of the German giant in Italy

The expansion plan of ALDI in Italy, continues Michael Gscheidlinger, 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:

– hiring of 200 employees,
– implementation of the organic assortment,
– introduction of the digital label and speeding up checkout operations, today one of the company's weak points, also through new self-checkouts,
– customer loyalty and digitalization of offers through Whatsapp.

2.2) Second phase

The second phase will be dedicated to the opening of new stores, starting from Seveso (Monza Brianza, Lombardy). With the prospect of increasing the capillarity of ALDI discount distribution (already 160) in Northern Italy. Southern Italy, conversely, unfortunately, for the moment, is excluded from the growth projects of the German giant.

The expansion will be accompanied by the opening to new product suppliers  Made in Italy. In this perspective ALDI participated in the formidable 2023 edition of TuttoFood at Rho Milano Fiera and plans to participate in Marca, Bologna, in January 2024. In addition to other international fairs.

3) Organic Growth

The Organic Department of ALDI Italy today includes 130 items – 4.3%, out of a total of about 3,000 – and boasts significant growth prospects. Especially in the sector  discount, under the banner of the ‘democratization of organic’ that this site has been calling for years and is finally happening.

‘We manage to contain the cost increases recorded in the market especially in the organic department, also thanks to solid relationships with our suppliers which we tend to renew through annual tenders’.
Among Aldi’s organic suppliers are some major Italian companies such as Agribologna, Spreafico, Cultiva, Santacroce for Tropea IGP onions.

4) Prospects for Product Suppliers  Made in Italy

‘ALDI is always open to welcoming new suppliers who adhere to its values and standards. We already work with the main food producers  Made in Italy, not only in fresh products.

The advantage of entering ALDI’s list of suppliers is the opportunity to operate within an  international network  of stores where agro-food excellences made in Italy are increasingly in demand. (1)

Through our logistic platforms, we can promote the process of  internationalization of the country’s companies by ensuring placement of their products 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 over one thousand respondents aged between 18 and 65.

According to the study, it is precisely the departments dedicated to food products where customers spend the most time.

5.1) discount increasingly similar to supermarkets

‘The data shows us that the ways of visiting our stores are not very different from those of supermarkets. Probably because today the discount formats of thirty years ago no longer exist and the stores guarantee a shopping experience very similar to that of the supermarket in terms of assortment depth, space organization and store design.

The frozen food department marks an overtake on supermarkets because it is more frequented by 3.2% of consumers, 6% of total discount stores, compared to 1.9% in supermarkets', explains Cosimo Finzi, director of AstraRicerche.

5.2) The most attractive elements

Among the most attractive elements of the point of sale prevail

• indications of offers/promotions (55.3%),
• price tags (49.8%),
• order and cleanliness (39.1%),
• the arrangement of products (35.4%),
• the presence of short-term themed areas like themed weeks (18.2%).

The data relating to format of the store increasingly approach the perception that the consumer has of discount to that of supermarkets given that the indications of the various departments/products are considered attractive by 14% of the sample for discount and 18.7% in supermarkets. The same applies to the presence of staff and of assistance (13.9% and 18.4%) and the presence of promoters (4.2% and 6.2%).

5.3) Theecommerce is distant

An internal analysis by Aldi on its clientele recorded that the consumer shopping experience mainly rewards pleasant store colors, clear signage on walls, background music, correct temperature, and deep assortment which received a score of 7.8 on a scale from one to ten.

Low prices, which represent the beating heart of the policy of discount, however, do not yet make sustainable the launch of a platform ecommerce Aldi.

Mariangela Latella

Notes

(1) ALDI is today the fourth retailer at global level – after Walmart, Amazon, Schwarz – with 130.4 billion in turnover. See https://nrf.com/blog/look-2023-top-50-global-retailers