Aldi Nord will introduce name brands

Aldi Nord will introduce name brands

Aldi Nord will use more name brands after it realized its affiliate company Aldi Süd was very successful with their introduction.

Fear of comparability

This summer, Aldi Süd announced it would include more than 50 name brands into its product range, while Aldi Nord has kept the range of name brands rather limited, although it will change that in the future according to German LebensmittelZeitung. Aldi Süd's name brand push has apparently been so successful Aldi Nord could not stay ignore its positive effects.

 

Brand suppliers have not been reticent about doing business with Aldi out of fear the move might hamper their relations with other chains. On the contrary, according to LZ, it has been Aldi's own choice to only trickle name brands into its product range over the past few years. Aldi Nord in particular has apparently been very hesitant to add name brands as that could make the chain far too comparable with other chains, giving competitors a chance to go below Aldi's price range on a structural level. Such a move could strike the discounter right at its core.

 

That is why Aldi Nord refused to tag along with Aldi Süd when the latter decided to add more than 50 name brand items to its line-up. That meant that brands from companies like Ferrero, Mars, Coca-Cola or Procter & Gamble (which are also present at Aldi Nord) would get the company of plenty of new brands at Aldi Süd.

 

More customers come more often

Aldi Süd's move proved to be very successful, something Aldi Nord has also admitted. LZ says that Aldi Nord admitted "that the numbers have proven our southern colleagues right". More and younger customers were apparently attracted to Aldi Süd's new product range, while customers visited the stores more often as well. As those were Aldi Süd's main issues, these seem to have been rectified with the introduction of name brands.

 

Insiders feel this is the work of Roman Heini, Aldi Uk's former CEO (which is part of Aldi Süd). He was the one who caused havoc among the major British service retailers when he made Aldi popular in Great Britain.

 

Ever since April 2015, Heini has been part of Aldi Süd's German board, exactly the time when the company decided to add more name brands to its line-up, a move Aldi Nord will now mimic. At first, it will do so in Germany alone, but it is deemed successful, it will probably be rolled out to Aldi Nord's other countries, including Belgium and the Netherlands.

 

Competitive climate is getting harsher

Service formulas will definitely feel the brunt of Aldi Nord's change in strategy as LZ claims Aldi's basic cost for name brand products is on a same price level as the temporarily discounted prices at service retailers. The magazine also quotes a manufacturer which states that Aldi can still operate at a profit margin similar to the margin it has on many of its "fancy" labels.

 

Service retailers will face an even harsher competitive climate now, especially as Lidl has already reacted in Germany by cutting its prices by quite a margin.

Questions or comments? Please feel free to contact the editors


Zalando's growth once again surpasses 20 %

10/08/2017

German Zalando has achieved its 20 % growth target for the second quarter, but just barely. It still forecasts a 20 to 25 % growth for its full fiscal year.

Gucci files lawsuit against Forever 21

09/08/2017

Fashion label Gucci has decided to file a lawsuit against fashion chain Forever 21 in the United States. The case revolves around several pieces of clothing, all with a blue-red-blue or green-red-green ribbon. 

Ralph Lauren outperforms expectations

08/08/2017

Fashion label Ralph Lauren’s first quarter was a very good one, as it beat both analysts’ turnover and profit forecasts. It is quite a turnaround for a company that suffered a huge loss only a year ago.

Difficult first quarter for New Look

08/08/2017

British fashion chain New Look’s past quarter was disappointing with a 4 % turnover drop. Its adjusted EBITDA fared much worse, with a 35 % drop.

ING forced to pay Foot Locker compensation

07/08/2017

Dutch ING Bank will have to pay the Dutch and European Foot Locker branches 300,000 euro in damages. A court decided the fee after Foot Locker was scammed for 1.8 million euro in 2015.

Asics opens its largest store yet in London

04/08/2017

Sports brand Asics opened a new flagship store in London, which is also its largest store in the world. Located in Regent Street, the store will bring together its four labels for the first time ever.

Back to top