The Secret's Out

Aug 25, 2008 12:00 PM, By JON SPRINGER

Discounter Aldi is well-positioned and growing, and doesn’t mind telling you so.


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For a retailer that won't ever be accused of being too fashion-conscious, Aldi is about as hot it gets right now.

“We're not exactly trend chasers here,” Jason Hart, president of Aldi's U.S. division, confessed during a recent interview with SN. “I would argue instead that trends are coming to us. Whether it's the growth of the alternative format, the growth of the small footprint, the big growth of private labels, or the recent trend toward value. That's what our business is all about.”

The Secret's Out

Throw in a shopping trip promising shoppers a weekly treasure hunt, along with a budget-driven plastic bag policy that just happens to put the retailer on the right side of the “green” movement, and Aldi — the bare-bones discounter that can't afford to be trendy — just might be the perfect vehicle for today's food shopper.

Aldi's package was created not in service of these trends, Hart explained, but to meet its own mission of providing quality food at the lowest possible prices through an emphasis on efficiency and thrift.

“It's not that we don't pay attention to trends in the marketplace — we do — it's that we're cautious and diligent in our approach,” Hart explained. “We have to be sure we stay within our model and try not to be all things to all people, as a lot of retailers have done, not all successfully.”

Its success in meeting these goals has the discounter on a brisk expansion kick, with new divisions opening in Florida this fall and Texas next year, and expansion planned for the Northeast and New England. Aldi, which has been opening an average of 50 new stores per year over the last three years, will open 100 new locations this year and by year-end expects to be operating 1,000 stores in 28 states from Vermont to Oklahoma. Its expansion will showcase a bright new store prototype merchandising a selection of Aldi's private brands undergoing their own renewal.

To relay this news, the normally opaque retailer is making a concerted effort to raise its profile. It ran television ads in the U.S. for the first time this year and is reaching out to the press to tell its story.

“We want to be more widely recognized as a trusted grocery brand that delivers high quality and high-value products,” Joan Kavanaugh, vice president of purchasing, told SN.

Aldi remains reluctant to share financial data, however. It would not comment on the accuracy of SN's estimate that it generated $5.8 billion in U.S. sales last year.

New Prototype
A new store in Geneva, Ill., a few miles from Aldi's headquarters in Batavia, showcases Aldi's new profile.

The store, while maintaining the same 10,000-square-foot selling floor as previous incarnations, is considerably brighter and airier than previous models, thanks to its high ceilings, colorful walls and new graphics. The store exterior is dominated by a two-story, glass entryway presenting a cleaner, more attractive package.

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