As a bargain store undercuts rivals like Tesco, the Aldi price myth is exposed: ‘Get what you see.’
According to a supermarket insider, ALDI’s great decision to just provide a limited assortment of goods to customers has allowed it to significantly undercut competitors such as Tesco and Sainsburys.
Secrets of Your Supermarket Food returns to Channel 5 screens tonight, with presenters Sian Williams and Stefan Gates giving an inside look at how the industry works. Aldi, a German bargain retailer founded in 1946 that entered the British retail industry in the early 1990s, is likely to be one of the stores featured. According to estimates, Aldi now has over 10,000 outlets in over 20 countries with a turnover of €50 billion (£44 billion).
It has now become one of the most popular sites for British customers to buy food, owing to its low-cost products that are sold at a fraction of the cost of typical supermarkets.
Following the financial crisis of 2008, Aldi decided to invest more money in securing outlets in the United Kingdom, with intentions to open 1,200 stores by 2025.
Consumer experts have questioned how Aldi is able to undercut its competitors, and where this leaves the rest of its competitors, given their reputation as one of the largest retail brands in the UK.
Natalie Berg, from Planet Retail, said on 2014’s The Rise of the Discount Supermarket in the UK that by selling fewer products to customers, they were able to work with fewer suppliers, resulting in less money being spent on other retail features that drive up prices.
“When you come into an Aldi, for example, you only have roughly 1,300 or 1,400 products to choose from, compared to 30,000 in a regular supermarket,” she explained.
“By focusing on only their own label ranges and reducing the quantity of items to a minimal, they are able to deal with significantly fewer suppliers, which helps to keep costs down.”
“It’s all down to what you see is what you get – and that’s what’s attracting UK shoppers,” said Tim Downs of Aberfield Communication.
“In some circumstances, the prices they can charge are much lower than those of our big four, who have always been price leaders and champions.”
Ms Berg also revealed how Aldi was able to attract shoppers on Channel 5’s Supermarket Wars. “Brinkwire News in Condensed Form.”