Aldi stocks premium brands to compete with Lidl
stocking premium brand-name product lines to compete more
effectively against discount rivals, as financial results indicate
a profit slide.
Reports suggest that Aldi's change of tack to pursue a 'soft discount' strategy follows a predicted drop in profits. The Nuremberg-based GfK market research institute estimates that Aldi's German sales fell by 0.6 per cent in the first half of the year, while Lidl's sales grew 13 per cent in the same period.
In a shift that will produce huge opportunities for big name suppliers, Italian confectioner Ferrero has become the first company to persuade Aldi to abandon its hard discount strategy.
They signed a deal to supply the German retailer with seven of its chocolate brands.
Aldi stores across Germany now stock the Rocher, Giotto, Ferrero Kusschen, Kinder country, Milch-Schnitte, Kinder pingui and Kinder Uberraschung product lines.
Previously Aldi chose to pursue a hard discount retail strategy, refusing to stock branded goods in favour of its own private lines. Other discount chains, such as rival German discount retailer Lidl, have instead adopted soft discount strategies selling a mixture of exclusive and branded products.
And this approach may be proving more lucrative for the discounters.
Proctor and Gamble and Kimberley-Clark recently signed deals with Lidl, prompting analysts to question when Aldi will do the same.
Aldi is currently the world's number nine food retailer - worth €35.9 billion - with 7000 stores across Europe.
