Aldi : The Double Guarantee And Customer Loyalty

ALDI claims that when you shop at ALDI, you can always count on finding products that are consistently equal to or better than the top national brands in quality and taste, for up to 50% less than at traditional grocery stores. ALDI claims that by shopping at their stores, one can save an average of $115 a month on family’s groceries on staples like fresh produce, milk, bread and eggs.

Strengths of Aldi include their low cost strategy that differentiates them from the competitors as well as selling top quality products. The low costs are due to low operating costs as ALDI has made deals with different suppliers, purchasing straight from the manufacturers, adding their own label to it, hence decreasing the ‘brand cost’ of the products. For example, customers are purchasing Heinz ketchup, that produced in the same manufacturing plant but it just contains an ALDI label, which makes it cheaper to purchase but the quality stays the same. ALDI has a strong presence in Germany with over 2500 stores and their presence here in the U.S. keeps on growing. Another strength is that there is only four employee roles in ALDI. These positions include store manager, assistant store manager, store assistant, and caretaker. This offers an advantage due to the fact that it is easier to delegate, train, and assign mandatory tasks for each staff member.

Aldi is a discount retailer that was founded in Germany by the Albrecht brothers in 1946. The company owns over 10,000 stores in over 17 countries that generated $66 billion in sales in 2012.The retailer entered the US market in 1976 and now operates more than 1,200 stores in over 32 states with the plan to open 650 more until 2018.

(Please note: Task 1, 3 & 4 have been combined together into one report. Task 2 is separate and can be found on page 9)

Aldi (Albrecht Discount) is a family based, discount supermarket chain based in Germany. The first foundation stone was laid in 1913 with the opening of a small food store in the German town of Essen. These organizations operate independently from each other within specific market boundaries.  The core values and principles that the brothers founded the business upon at the outset continue to be central to the strategic direction and decision-making principles today.

The Purpose: Today’s society focuses on customers’ satisfaction, most business ask the consumer to take surveys to learn more about their experience. It is highly important to make sure our customers leave happy and satisfied with our service, and if they feel any different we need to get

Furthermore, Aldi maintains a very low price range which satisfies their customers and creates a better customer relationship.’

The main focus of Aldi is to offer the lowest possible price to the customer while operating their stores at the lowest cost as well. I have already stated how Aldi does not invest in advertising or any research of any kind and the main investment is in building new stores or logistics to supply those stores. But Aldi’s also uses the strategy of tricking its customers to do all the

Aldi’s growth of new stores is a key part of the business strategy and therefore an area that receives close management attention. The new international optimum standard for new build stores has recently been agreed and set at 990sq/m for the very reasons. Also, when building new stores, the property management team are constantly looking at the level of new build costs. With a close eye for detail and a focus on stripping out unnecessary costs, looking for new innovations in ergonomics, as well as the way each site is physically constructed and fitted out. All these factors get micro attention to detail. ALDI has realized that “people are the key to every success” (Working for ALDI 2011). Because of the same, there is an efficient human resource

Costco is not a direct competitor as it competes in the warehouse club industry. However, Aldi and Costco are similar in how they sell products off shipping pallets eliminating fancy store designs. Retail giants Walmart and Target are briskly expanding their grocery options. However, due to their large size they are not able to benefit from the same efficiencies as Aldi. A pricing survey in July by Bloomberg Intelligence found Aldi items averaged about 19 percent less than the comparable Wal-Mart items, undermining Walmart’s ELP concept. Mass retailers do not offer the same product selection in the grocery section but they compete on convenience (“one stop shopping”). Online players Google and Amazon have also added grocery delivery to their offering and they compete on speed and convenience.

The ALDI brand has many strengths, including sales volumes, providing nutritional products, discounts are passed on to consumers, and fast efficient shopping. “ALDI is the world’s largest discount store operator by sales and has flourished for more than 40 years without stocking major brands,” ( news.yahoo.com) The fact that ALDI is the world’s largest discounter without having to pay the price of carrying major brands is an impressive feat. The brand capitalizes on this in the United States with “ about $8 billion in annual sales and is growing from 15 to 20 percent per year,” ( bloomberg.com) .

The ALDI brand has many strengths including sales volumes, providing nutritional products, discounts are passed on to consumers, and fast efficient shopping. “ALDI is the world’s largest discount store operator by sales and has flourished for more than 40 years without stocking major brands,” ( news.yahoo.com) The fact that ALDI is the world’s largest discounter without having to pay the price of carrying major brands is an impressive feat. The brand capitalizes on this in the United States with “ about $8 billion in annual sales and is growing from 15 to 20 percent per year,” ( bloomberg.com) .

ALDI offers goods at low prices with limited substitutions within their stores. Carrying less than 1,500 products total, the stores offer discounted generic brands for their customers. By doing this, this keeps the prices low and also brings increases the overall profitability for the ALDI company. However, ALDI doesn’t have much of a control over the price of substitutions for packaging. This means that the packaging companies set the price for the materials used to package goods for ALDI’s stores. Large grocery stores products serve as competitive substitutions for ALDI. Customers who prefer the taste of well-known brands’ products over generic products may factor that in when deciding where to shop. A customer may be hesitant to try a generic brand at a lower price if they have a particular taste for the branded substitutions. Products can also serve as substitutions when price is a factor. ALDI’s products are at discounted prices and customers who want to spend less on products will take the lower priced product over its more expensive substitution. This works as an advantage for the

2. Price: Once again, Aldi triumphs with a 5 star rating for price. IGA, Woolworths & Coles received 3 stars each for price.

It’s essential that companies or businesses today listen to their customers. No company or business today can afford to disregard the importance of customer satisfaction and loyalty. Aren’t they the same thing? No, they are absolutely not and they are enormously