Despite its recent acquisition of Leader Price, Aldi is performing below expectations in France. The retailer has replaced management and is investing another 400 million euros in logistics and expansion.
Exit is not an option
With more than 1,300 stores in France, Aldi remains stuck at a market share of barely 3%, well below arch-rival Lidl (8%). The acquisition of 567 stores from discounter Leader Price in 2020 could not turn the tide: the acquired stores perform weaker than the existing Aldi stores. This weighs on profitability.
Aldi Nord has now decided to intervene and is investing another 400 million euros in its French subsidiary this year. The discounter plans to build three distribution centres and also wants to expand existing warehouse space to lay the foundations for further expansion.
Since 2018, the retailer has already invested 2 billion euros in its French operations, writes Lebensmittel Zeitung. The head office has also almost completely replaced management there. An exit from France, like from Denmark last year, is not an option for the discounter, given its huge investments and large market potential.