Swot Analysis Of Aldi Süd

About the Brand

Aldi is a leading global discount supermarket chain with over 10,000 stores in 18 countries, and an estimated turnover of more than 50bn euros. Based in Germany, the chain was founded by brothers Karl and Theo Albrecht in 1946 when they took over their father's store in Essen, which had been in operation since 1913; it is one of the world's largest privately owned companies. The brothers built up a chain of stores until, by 1960, they owned 300 shops, and split the operation into two separate groups, that later became Aldi Nord, headquartered in Essen; and Aldi Süd, headquartered in Mülheim an der Ruhr. The two operate independently, each within specific areas. In 1962, they introduced the name ALDI (abbreviation for Albrecht

Internationally, Aldi Nord operates in Denmark, France, the Iberian Peninsula, and Poland, while Aldi Süd operates in Ireland, United Kingdom, Hungary, Switzerland, Australia, Austria and Slovenia. Both Aldi Nord and Aldi Süd also operate in the United States; Aldi Nord is the owner of the Trader Joe's chain, while Aldi Süd operates as Aldi.

Aldi’s plan

Aldi’s business model centres mainly on selling its own high-quality brands at low prices. It specialises in staple items such as basic foods, toiletries and cheap household items.

Selling its own generic brands means the store isn’t paying a premium to a major manufacturer for a well-known brand – and so it can pass discounts on to shoppers. In comparison, other supermarkets tend to have a 50% split of own products versus other brands.

That keeps the German store cheaper than the alternatives. A study by Grocer magazine found that on a shopping basket of 33 items Aldi was 16% cheaper than Asda, 20% cheaper than Tesco and 40% cheaper than Waitrose.

And despite the bargain-basement image, some Aldi products are better than pricier

However, beneath that a £30m investment in a straightforward, neat store refit is complemented by an improvement in both product mix and quality. Aldi has had difficult periods after their initial boom in trading at the start of the recession in 2008, suggesting it is not simply the economy that has driven customer numbers.

The retailer – named The UK’s Best Supermarket according to consumer campaigners has picked up many awards for best in class products from lifestyle magazines, industry awards and independent panels.

Aldi’s marketing too has picked up pace. The simple message from its 'Like Aldi. Like brands. Only cheaper’ aims to show that you get the same quality goods yet cheaper has struck a chord with shoppers. The marketing offensive has seen ads comparing branded baked beans, washing liquids etc with Aldi’s version, hit screens across the year.

The advertising campaigns are excellent, where they explain their proposition. Even though the store experience is not particularly exciting, people come out with good products at a price they’re pleased