Fashion

Discounter Aldi plans to open forty new stores in Hungary by the end of 2014, lifting the total number of stores to 110. In each of the next three years, the chain hopes to open between ten and fifteen stores, especially in Budapest and the county capitals, as spokesman Tibor Székács told Hungarian newspaper Napi Gazdaság.

Looking to increase market share through new stores...

Aldi has only been active in Hungary since 2008, and has built 75 stores since then – of which 13 in Budapest alone. The group hopes to open three more stores before the end of the year, which should allow to lift turnover growth in the double figures. To achieve a significant market share (currently only at 1 to 2%), Aldi Süd is also looking for possible acquisitions – and that would be a first for Aldi in Hungary.

... and through a quality boost

Spokesman Székács then surprised with a plea for quality over prices: he said Aldi Hungary aimed for “exclusivity in the stores, well educated staff and excellent parking places” to earn them a place in the Hungarian market. Székács also stated that “certain people, in putting price before quality, have destroyed the image of private labels because of their short term thinking.” “People have to understand that a certain quality comes with a certain price”, were the surprising words of Aldi's spokesman.

Aldi Nord, the more conservative of two separate Aldi companies, is secretly testing a new generation of stores, very aptly named Aldi New Generation. RetailDetail already reported about the secret pilot store in Mariakerke (Ghent), but with the discovery of a second 'New' store in Putte (Mechelen) the existence of a New Generation is no longer in doubt.

New folder strategy leads to new store design

Make no mistake: Aldi's assortment and pricing will remain the same – only the perception changes. Still, these changes will be quite significant: a different logo, more daylight in the store, product displays with a picture and a more surveyable design should make sure customers have a more agreeable shopping experience.

The first signs of change were already visible in January, when Aldi left its eternal leaflet strategy to push temporary promotions on the first three pages. The chain also started experiments with special weeks with focus on Spanish, Italian or Asian products: the first step towards highlighting quality as well – not just its image as hard discounter. 

“A sensible choice, as Aldi's market share has been under a huge pressure from Colruyt and Delhaize's private label strategies”, as retail expert Jorg Snoeck explains. Indeed, Aldi Belgium's turnover went down for the first time last year– even if only by 0.5%. Not only the big two's private label strategy, but also the sharp promotions on A-brands proved to be a big threat for the German hard discounter.

More light, more colours, more comfort

The new store design is the next step for Aldi's modernisation, and one can say that its new leaflet style has been used to upgrade the stores as well. Apart from the larger windows and the new displays (grey instead of orange), the new stores will have wider aisles, modern materials, shades of blue instead of the omnipresent brown and lower shelves. The “look and feel” also benefited greatly from Aldi's decision to place huge pictures next to certain types of products – think of a delicious picture of ice cream in the freezer section... 

Another delightful novelty is the baking machine, which bakes smaller bread rolls on the spot. Aldi Süd introduced this machine months ago, now the more traditional Aldi Nord also features it in the Mariakerke pilot store – despite bakers' protests who claim this “baking machine” is merely heating up the bread rolls while the actual production is done by baking companies in other places. This German trial is still pending – but clearly Aldi Nord did not wait for the results.

Excellent results... but what in the long run?

The 'New Generation' stores in Mariakerke, Putte and German Koblenz are rumoured to achieve excellent results, as they combine the best of both worlds: Aldi's classical no-nonsense approach and a nicer shopping experience in the stores. Though customers react very pleased to this restyling, this might be a dangerous move for Aldi Nord. Choosing for quality over price can endanger the whole discount strategy, even if the first steps are rather small. “You can not be a bit pregnant”, as discount godfather Frans Colruyt once stated. It will be a tough task for Aldi to fulfil both its discounter's mission statement and its new promise to improve quality and experience. 

Aldi consists of two separate entities with clearly distinct territories. Aldi Nord has the North of Germany (hence the name), Belgium, the Netherlands and Poland, while Aldi Süd has the South of Germany and more southern countries like Switzerland, Austria , Hungary and Greece. Strangely enough, the UK and Ireland are Aldi Süd's territory, while Aldi Nord holds France, Spain and Portugal. The chain has about 8200 stores in Europe, the US and Australia.

In Mariakerke, near Ghent, Aldi has opened a completely renovated store: large windows ensure more sunlight inside and Aldi's trademark blue is omnipresent throughout the store. 

New colours, more light, modern materials

The new style puts much effort in avoiding anything that makes “normal” Aldi stores boring. Much like the use of Aldi's blue instead of current brownish colours and the larger windows, the use of new and modern materials and pleasant images in the different departments catch the eye.

"Aldi New Generation"?

The spectacular renovation – especially for Aldi's habits – feed the rumours that this is not just a store renovation, but rather a pilot experiment that would be named “Aldi New Generation”. The German newspaper Lebensmittel Zeitung also wrote the new concept would be seriously considered in Germany.

It is uncertain if the continuing criticism that Aldi was not innovating enough led to this breakthrough, and why Aldi picked Ghent for the pilot experiment. The German chain refused to give any comment.

Belgian hypermarket group Cora will open a renovated shopping centre in the Northern French city of Cambrai next week. Apart from a Cora, the centre will hold 30 stores, including a flower shop and a jewellery store. 

18 months of reconstruction

The reconstruction works have been going on for 18 months. “It was difficult, as we had to keep the old Cora hypermarket open”, says director Gérard Zanelli. “Now we can offer the customers a larger shopping experience, as the rest of the gallery is a coherent complement to the hypermarket itself.” A game shop, a chocolate store and three bistros, amongst others, will widen the customers' experience. 

Focus on core business: food

The hypermarket itself was also modernised, with higher accessibility, a new wine department and a local product corner. “We have indeed focussed on our core business: food”, says Zanelli. A larger butchery and vegetable department should prove that intention. For customers in a hurry, Cora plans to add a drive-in at the end of the year. 

French supermarket chain Carrefour has appointed Thierry Garnier as executive director of China and Taiwan. Garnier was executive director for growth markets until a musical chairs scene at the top of the world's second largest supermarket chain gave that role to Pierre Bouchut.

Bouchut punished for Brazil failure

Earlier this month, Bouchut had to leave his post of Carrefour CFO after failing to secure the takeover of Brazilian Grupo Pão de Açúcar. Pierre-Jean Sivignon (former Philips CFO and vice president) took over that post and Bouchut was demoted to director of growth markets, replacing Garnier. The chain then announced it would “find a suitable position for Garnier” - which turns out to be in China. 

Garnier, 45 years old, has risen through the ranks of the Carrefour directors since 2008, when he became managing director international, before becoming executive director of “South East Asia, European countries, India and International Partnerships.” Since 2010 he has been executive director for growth markets, a position he will hold until April 2012. For Eric Legros, the man he will be replacing, a new function will be created: that of Executive Director Group Merchandise.

A kingdom of 245 hypermarkets

Present in China since 1995, Carrefour currently owns 185 hypermarkets. Last year, it strengthened its position in China by acquiring a majority of Baolongcang, a chain of 11 hypermarkets in Hebei province near Peking. Much like in the rest of the world, Carrefour has to look up to see rivals Walmart, who have near 200 hypermarkets and a new discount chain to serve the poorer rural population. 

In Garnier's other country, Taiwan, Carrefour's network consists of 60 hypermarkets and 3 supermarkets.