Germany Aldi Benefits From Brand Listings

Matthias Queck (Research Director)
25 April 2017
This must have been a very popular brand promotion at Aldi Nord.
LZ Retailytics
This must have been a very popular brand promotion at Aldi Nord.
Discounters Aldi Nord and Aldi Süd in Germany are increasingly benefiting from brand products on their shelves, Lebensmittel Zeitung reports. In addition to new permanent listings, weekly promotions – where brand products are being offered as long as stocks last – are becoming more crucial to drive footfall and sales. They not only work as a test field for potential new listings, but also round off the overall offer.

“An item is of interest to us if a customer would otherwise go to our competitor,” an unnamed Aldi manager is quoted as saying. Relatively new for Aldi are also sweepstakes and competitions with brand suppliers such as Coca-Cola, as well as promotional placements on supplier-branded trays at Aldi Nord.
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Matthias Queck (Research Director)
Matthias Queck (Research Director)

Opinion Aldi Pays a High Price For Brands

25 April 2017
The pros and cons of brands at Aldi have been discussed extensively. Brand manufacturers for mass market products are mostly in favour. They see their annual sales targets exceeded, thanks to the high volume pushes, which are considered more important than an initial price war phase. That will usually be over after a year or so. Or two. Or three. Or still drag on after four (in the case of Coca-Cola).

Aldi sees that customers are coming back again, especially the younger shoppers that it most needs to convince. Because these customers, who are used to flying to Majorca for EUR5, no longer understand the need to compromise to get low prices. And so sales are again rising, despite a saturated market. 

But this is exactly the danger. Relying on brands offered on promotion is not what Aldi stands for. It can do it, of course, as long as it does not miss its original USP, which is high quality private label products at the lowest market prices. But Aldi’s Ferrero Rocher for EUR3.19 at Easter looks overly expensive next to Rewe supermarket’s offer for EUR1.99. And bumping in the Somat Christmas promotional tray at Easter does not make Aldi Nord look like a retailer who is on top of things either.

So if price leadership is undermined, there should be an even stronger focus on product quality. But this is an area where competitors have made up much of their leeway. Independent tests show that they can easily keep up with the discount behemoth. And as long as the own label toothpaste continues to leak from the tube into the cap, it is no wonder that brand products are becoming increasingly popular.
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