This week I remembered the time in Australia when I really wanted to eat something familiar from Germany and suddenly in Mooloolaba I found an ALDI store and I took my chance to eat German Sausages and some German Sweets. And I was surprised how similar the product portfolio was to the German stores. This brought me to the idea to post about the adaptation of this supermarket within the countries it already started to expand to.
Firstly ALDI is a German supermarket chain which was implemented from the Albrecht Brothers as a new business model in Europe because it sold groceries at discount prices already in the year 1962. The name is the short version of Albrecht Discount. The motto was and still is “Discount is the art of leaving something out”.
ALDI can price their products relatively low because they use no name products which are interestingly often only labeled different as brand products but produced in the same way. Moreover the quite small advertising strategy, the simple store equipment and composition and the use of fast-moving consumer goods, which is significant for products of the daily use which are bought fast by the customer out of their habit.
But how does ALDI manage cultural differences?
Well, they do not adapt a lot but they succeed in showing their customers that they offer same quality for less money. Since ALDI is offering the products which are used regularly adaptation is not a big issue because of the similarities in these basic products in the countries where ALDI is doing their business.
Of course they needed to adapt to the United States customary units system to sell their groceries in the US. Moreover they have small adaptation to the taste as for example the offered bread in Germany which matches the local standards.
There are three more things I like about the ALDI stores.
- ALDI does not offer free bags which is very good for the environment [The ones you can buy you can use again and again]
- ALDI uses weekly offers to attract their customers. And we know how often we need to buy the basic things [it is weekly in my case]
- ALDI chooses good locations for their business (e.g. in the US next to the WalMart) to get the customers to their store [buy basic products at ALDI to save money and for brands you can go to other stores]
All things considered ALDI is a good example how your business culture can be used to avoid a lot of adaptations which are equal to higher prices caused by product differentiation. I mean everyone in the world would like to buy same quality products for a lower price. At the moment ALDI is operating with ca. 10,000 stores in 15 European countries, the US and Australia. And I think there will be more stores in more countries soon and they will be successful if ALDI is not pushing this expanding process too fast.
Do you have any discounters in your country already which could take the competition with ALDI?