Cost-cutting measures are eroding Aldi Süd’s market share

A rigorous cost-cutting policy at discount retailer Aldi Süd is leading to declining market share in most countries where the company operates. According to critics, the retailer is losing sight of its customers.

Stores in disarray

A policy strongly focused on efficiency—in which Aldi Süd has pared down its product assortment, streamlined its brand portfolio, and optimized its processes in recent years— is leading to a loss of market share in most of its eleven national subsidiaries, reports the German trade journal Lebensmittel Zeitung. Aldi Süd is losing ground in the United Kingdom, Ireland, Switzerland, and its home market of Germany, among other places, while rival Lidl is gaining ground.

While the cost-cutting measures are improving profitability, the retailer did not anticipate the decline in market share, insiders told the magazine. One of the sticking points appears to be that the discounter has also downsized its sales department. There are increasing reports from both within Germany and abroad that stores are in disarray. “I get the impression that there’s no one left in management who stands up for the customer,” a former top manager told the magazine.