German retailer Aldi - an abbreviation of Albrecht Discount - has led the rapid growth of the so-called "hard discount" sector in the European retail industry, stripping out all unnecessary costs in order to sell a carefully controlled selection of high-volume own-label products at rock-bottom prices. Despite its stripped-down offering, Aldi has developed an unlikely position in Germany as one of the country's best-loved institutions, frequented by wealthy bargain-hunters as well as the less well-off. That's largely because of a focus on high quality despite the low pricing. The family-controlled group also has an extensive global profile, with operations as far afield as the US and Australia, as well as other European markets. In several countries, not least the UK and Australia, the relentless expansion of Aldi and also its domestic rival Lidl, has resulted in fierce competition with local chains who have struggled to match the German group's prices.
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Adbrands Weekly Update 15th Jun 2017: It looks like a price war is coming to the US supermarket business. Discounter Aldi is ramping up expansion plans as it prepares for the arrival of German-born rival Lidl, whose first American stores opened this week. Aldi announced a further $3.4bn investment in its US subsidiary, and plans to expand its footprint to 2,500 locations by the end of 2022, from around 1,600 at present. That would make it the country's third largest supermarket retailer by outlets behind Walmart and Kroger. It is already spending several billion dollars more on store renovations. Expansion by Aldi and Lidl has already overturned the traditional order in the UK and Australian supermarket sectors.
Adbrands Weekly Update 9th February 2017: After months of neck-and-neck rivalry, Aldi has overtaken The Co-op for the first time to become the UK's 5th largest food retailer. Kantar Worldpanel figures for the 12 weeks to 29th January estimated Aldi's share of till roll at 6.2%, compared to 6.0% for Co-op. It was perhaps unfortunate timing that, later the same day that Kantar's figures were published, Richard Pennycook resigned as CEO of Co-op Group. His departure was not connected to the market share figures, and he will in fact be succeeded by Co-op retail chief Steve Murrells. COO Pippa Wicks moves up to deputy CEO. Pennycook is widely credited with having rescued The Co-op from near-collapse in 2013, as a result of the financial crisis at its banking division.
Adbrands Weekly Update 10th Nov 2016: Ads Of The Week: "Kevin The Carrot". Aldi's UK Christmas campaign couldn't be more different if it tried from its Australian cousin (see our Facebook page) in which a family of horrendously exaggerated brash Americans discover the joys of an Australian Christmas. Our British campaign is far more restrained. Also perhaps borrowing a leaf from Sainsbury's 2015 campaign, agency McCann London has plumped for a CGI children's story featuring not animated animals but animated vegetables, recounting the (mis)adventures of Kevin The Carrot. It's a charming fable, and all that food looks truly delicious. Watch out Big Four supermarkets! Aldi is planning to take another big bite out of your market share this year.
Adbrands Weekly Update 29th Sep 2016: The UK division of discounter Aldi reported record revenues for 2015, but a decline in profits that reflected the brutal competition within the supermarket sector. Revenues were up 12% to £7.7bn, boosted by premium products. Sales of wine and "specially selected" food products jumped 20%, the company said. However price-cuts resulted in a 15% decline in pretax profits to £212.6m. "We will not be beaten on price," said CEO Matthew Barnes as he vowed to keep cutting prices to remain the UK's cheapest supermarket while also offering top quality products. Latest Kantar Worldpanel figures for the 12 weeks to 11th Sept show Aldi holding firm at record market share of 6.2%. Waitrose and Lidl were also at best-ever results of 5.3% and 4.6% respectively. At the top end of the table, Walmart-owned Asda clawed back some ground, regaining 15.7% of the market, now just 0.2% behind Sainsbury. The latter issued a quarterly update this week showing a 1.1% decline in same-store sales, slightly higher than the previous quarter, and caused by the continuing price war within the market. Tesco still leads at 28.1% market share.
Adbrands Weekly Update 22nd Sep 2016: Aldi launched its first ever TV advertising campaign in Germany. Previously it has only used other media, such as radio, press and out-of home. It has also in the past managed all media planning and buying inhouse. Now, rather than appoint a traditional media agency, it named Neo@Ogilvy, the digital arm of its newly appointed creative agency Ogilvy to handle all TV and online media. Out-of-home is to be directed via indie shop Jorst von Brandis, with cinema advertising through another indie, Fluent.
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