Aldi Nord eyes up Poland and Czech Republic
markets in central Europe, with a particular emphasis on the Czech
Republic and Poland. But is it too late to try and enter two of the
most developed discount food retail markets in the region?
According to a report from Lebensmittel Zeitung, the retailer is still at the early stages of business development for this region and there are no concrete plans at this moment in time. Having left it this late, many observers believe that these two markets are already reaching saturation point and that there may not be room for another major western European discount retailer - a point of view that the company strongly contends.
According to the report, Aldi is more confident about breaking into these markets, having said of the central European market at the beginning of this year, "if someone were to approach us and offer 50 stores, we would take them immediately."
Aldi would also rely on statistics to back up their argument. Currently the massive and highly developed German discount store market offers 3,800 Aldi retail stores alone for a population of 80 million people, whereas in Poland there are currently a total of 1,200 discount stores for a population of 40 million.
Further to this Aldi says that because price sensitivity is such an important issue for Polish food consumers, its ability to offer competitive discounting will put it in a very strong position. The same can be said for consumers in the Czech Republic. This is due to the fact that, although incomes are rapidly growing, both countries spend a higher percentage of income on food than in other western European countries.
Aldi also believes that it is in a stronger position because both countries are now a part of the European Union. From both a logistical and legislative point of view this now makes the whole process of setting up stores and establishing distribution systems a much simpler and less expensive process.
Finally Aldi can also claim that its name is also well known in Poland - the largest market in the region - where during the early 1990s Polish customers would travel into the then Eastern Germany to buy up what they deemed to be competitively priced goods from the company's outlets.
Admittedly it is late for Aldi to enter these relatively developed central European markets, but with a strong brand name, EU market entry laws and further market potential to tap in to, late entry or not, the company may still be able to get a foothold.
