Life,  Wealth

Aldi: How the Discount Grocery Giant Stole the Hearts of British Shoppers

Aldi, a German budget supermarket that does not offer online shopping, rarely discounts, and never promotes, has become the fourth largest supermarket in the UK.

Anxiety at the checkout counter

The cost of living crisis has plunged the British middle class into “middle-class poverty” (Middle-class Poverty): living in a beautiful house, driving a new and good car, affording a nanny, having one or two children at home attending a private school, kitchen There is a SMEG refrigerator in the house, but there is no extra money to buy clothes, take a taxi or go to a restaurant. Also, you can’t save money on vacation, so you can only save money elsewhere.

One of the ways to save money is to go to the low-cost supermarket Aldi (known as “Aldi” in China) to buy groceries. Can’t go out to a restaurant? Aldi sells restaurant-style prepared and semi-finished dishes that taste good. According to a report released in January this year by “Which?”, the UK’s largest consumer evaluation website, Aldi is the cheapest supermarket in 2023. It wears this crown year after year. Which? picked 72 of the best-selling groceries and calculated how much it would cost to buy them, finding it only cost £129.24 at Aldi, which is £20 less than Tesco and compared with the most expensive supermarket, Waitrose. Saved over £40.

Aldi currently has 1,000 stores in the UK, most of which are located in wealthy towns. The number of customers will increase by 1 million in 2023. It is ambitious to open 500 new stores this year so that “every British person can find an Aldi within the nearest distance.” . Last year, Aldi’s full-year sales reached 17.5 billion pounds, an increase of nearly 2 billion pounds compared with 2022, breaking Aldi’s 33-year record in the UK. Giles Hurley, chief executive of Aldi UK and Ireland, believes that the pressure brought by the increasing cost of living has caused consumers to betray the old British supermarkets where their families have been shopping for generations and turn to Aldi of German origin.

From all aspects, Aldi has nothing to do with “high fashion”. The store is small and uses fluorescent lighting, giving it a rough and bright feel. There is no background music, and most of the products are placed in cardboard or plastic boxes and piled on the shelves. Cashiers have performance appraisals and are required to scan the barcodes of 35 to 40 items per minute. Their average speed is recorded on the cashier computer, and the manager checks it every night. Therefore, there is not enough bagging area for customers at the end of the checkout counter. The cashier pushes the checked products over and immediately starts serving the next customer. Customers arouse “Aldi anxiety” and worry that they are not packing fast enough, so they rush to pay, put their items in the trolley, and push them out. British retail tycoon and former boss of fashion brand Topshop, Sir Philip Green, emphasizes “shopping experience”, but Aldi’s cost budget does not include nihilistic “aesthetic” expenses at all. The core is favorable and low prices throughout the store. Competitiveness.

The variety of products in the store is also small, about 2,000, more than 90% of which are private brands. There is only one choice for each type of product: one kind of croissant, one kind of smoked salmon, one kind of bacon, and one kind of mushroom pate. Usually, there are more than 40,000 kinds of products on the shelves of large supermarkets, and Tesco even has as many as 90,000 kinds. Each kind has several brands of similar products, and consumers can buy enough groceries for their homes at one time. Aldi has confused customers who are used to shopping around. Where have all the things gone? Are there any other options? Where is the pain in comparing and choosing?

Therefore, although Aldi entered the UK as early as 1990, by 2009, Aldi’s market share was only 2%, and its customer base was basically students or people with financial constraints. Middle-class customers regard it as a “complementary” shopping destination, and the top four supermarkets are still Tesco, Asda, Sainsbury’s and Morrisons.

The British have a distinct snobbery for bargain shops. When a Times reporter reported on Aldi in 1991, he described its store area as less than 200 square meters, with only 600 basic products, as a typical “face of an Eastern European grocery store in the 1990s, with nothing in common” Specialties, with a hint of panic, trying in vain to find avocado or kiwi fruit in the store”.

In 2007, a lifestyle columnist wrote about her shopping experience at Aldi. She said that compared to the Sainsbury’s supermarket she often visits, Aldi’s similar products are indeed much cheaper, but the products include cheap and inferior canned meat and tattered items on the shelves. The rotten cardboard boxes, impatient clerks, and disgusting atmosphere make people feel depressed, and they wonder if the money is worth saving. Theo Paphitis, a retail entrepreneur and judge on the BBC business investment reality show Dragons’ Den, once said, “I would rather stick a needle in my eye than go shopping at Aldi.”

Peter Jackson, professor of human geography at the University of Sheffield, said that British consumers’ choice of supermarkets also reflects how they view their social class and status. British people seem to want a place “surrounded by people similar to themselves.” environment” so that we feel comfortable together.

The same view was expressed by former British Prime Minister David Cameron. Cameron has always presented himself as an elite middle-class person. He is a frequent customer of the high-end supermarket Waitrose. He said that the customers of this supermarket are “very talkative and easy to interact with” and are far “easier to deal with” than customers of other supermarkets. The comments sparked controversy, with observers suggesting Cameron meant Waitrose customers had a more middle-class feel.

Aldi supermarket that removes class characteristics

The turning point occurred in 2008. This year, the global financial crisis broke out and the inflation rate rose to more than 5%. The British bank Northern Rock collapsed and was nationalized, Lehman Brothers collapsed, companies laid off employees, and people’s wallets shrank. Large supermarkets have raised prices in line with inflation, hoping to maintain high profit margins of 7%. Under multiple economic pressures, consumers who want to save money are forced to turn to cheap supermarkets.

Going to Aldi is like going to church, it may not be fun, but it’s the right thing to do. Consumers have found that their psychology of looking at cheap products has changed, and they are more willing to look at the good parts of the product to justify not buying more expensive similar products. Since there is no difference in quality, why spend more money to buy the product’s brand story and pay for the company’s marketing? Consumers also eliminate the embarrassment of buying bargains and enjoy the joy of finding bargains. They turn around and walk into the cheap supermarket. There is no turning back. Tesco and Marks and Spencer have become supplementary stores that they only go to occasionally. In order to retain consumers, supermarkets such as Tesco and Marks & Spencer will mark the price tags of certain products as “same price as Aldi”. Tesco has also launched its own discount chain store Jack’s.

Aldi is on the rise. According to a report by market research and consulting firm Kantar, as food prices in the UK have risen at the fastest rate in 45 years in the past two years, Aldi has become the supermarket with the fastest growing sales in the UK, surpassing Morrisons last year to become the fastest growing supermarket in the UK. The fourth largest supermarket in the UK.

According to Aldi, half of its customers now belong to higher socioeconomic groups. Part of the reason for the change in customer base is that the British, who like to talk about class issues the most, have no class in food. The basic diet of postmen and financiers is almost the same, eating cereals, bread, cheese, beer, and ketchup. This makes Aldi removes class characteristics among consumers.

Aldi itself has also changed.

Today, you won’t find a hopeless “Eastern European experience” at Aldi, but you can find avocados and kiwis, and even French sourdough bread, Manuka honey, Italian prosecco and 36-day aged Angus sirloin. steak. The R&D department has followed the trend with caviar skin creams, protein bars and chia seed products, and Aldi nappies are the UK’s second most popular brand after Pampers. Bread and eggs are placed in the last shopping aisle, near the checkout counter. In this way, bread and eggs are placed on top of all the items in the shopping cart and will not be crushed. This is something Aldi managers concluded after carefully observing people’s shopping behavior. Other large supermarkets rarely have such an arrangement. These make people who look down on cheap supermarkets look at them with admiration.

The service has changed. In the early days, customers either had to rent a trolley with a £1 coin deposit, or they could only shop with cardboard boxes in the store, unable to write checks or swipe cards. After 2014, Aldi began offering shopping baskets and accepting credit card payments. The cashier will smile and chat with you, “I’m getting off work soon, so I’m smiling all the time.” Of course, the “Aldi scare” at the checkout is still there. But Aldi’s barcodes are different. If it is a cube package, there will be 4 barcodes, 2 on the sides and 2 on the larger flat surface. There are three barcodes on the butter box, two on a bag of vegetables, and the barcode on canned food covers half of the jar. Therefore, the cashier can quickly scan the code no matter which gesture he holds the product in, without having to waste time looking for the barcode. The packaging area behind the checkout counter is still very small. Customers can put the checked products back into the empty trolleys. Outside the checkout counter is a whole glass wall with a long organizing table where you can transfer the goods while basking in the sunshine. into a tote bag. This is the “sunshine packing place” that Aldi is quite proud of.

Panic and rush are the shopping experiences designed by Aldi. When you calm down and sort out your shopping results at the “Sunshine Packing Office”, you will realize that the cost of this cart of goods is lower than you expected; on the way home, you will also find that this shopping trip takes longer than other shopping trips. There are fewer supermarkets. What’s more, you’re not enduring the panic and rush just to save money, but realizing that “saving money” makes shopping a pleasure in itself, what Aldi management calls “the thrill of the checkout.”

We hate waste of any kind

Don’t bring a shopping list with you when you go to Aldi, because you never know what you might see that will surprise you. The products you can’t help but buy, especially the limited-time products on the “middle aisle”, if you miss them today, you won’t be able to buy them tomorrow.

The Aldi store faces the street with an entire glass wall, and the other three walls are lined with vertical fresh-keeping cabinets, freezers, and wine cabinets for storing fresh food. They are clean and bright, and the aisles are spacious, making people feel happy. Turning into the several rows of aisles in the middle of the store, you immediately have the illusion of entering a large-scale sale of goods: there are three-tiered stepped shelves on both sides of the aisle, with cardboard boxes piled on them. The products are thrown in the crates without any order. They are arranged by category. There are towels and hair dryers next to the pasta. Children’s toys, cushions and bottled seasonings, air fryers, and champagne glasses are placed together. Some product packaging boxes have been torn open by customers, and slippers and underwear have been turned around in a mess. ——The “Middle-aisle” is exactly the sales strategy invented by Aldi: after buying household necessities and saving so much money, I can give myself some rewards. Buy something that makes me happy and walk to the middle. The passage entered the reward stage, and shopping finally turned out to be that I only planned to go in to buy a bucket of milk, but ended up carrying a paddle board.

The products in the “middle aisle” are frequently changed, limited in quantity, and sold out. The unpredictability further strengthens customers’ impulse consumption. For example, French-style pesto rusk potato chips will be on the shelves in March, and there will also be a jar of scented candles weighing 2.5 kilograms, priced at only 25 pounds, which is 160 pounds cheaper than buying the same candle from Jo Malone. Someone bought a garage door motor at Aldi. Every year on Christmas Eve, Aldi sells a limited edition stuffed toy “Kevin the Carrot”. Someone buys it and sells it on eBay for a threefold premium. Some Kevin collectors buy it every year, queue up outside the store at 5 a.m., and then post photos on social media of her holding a steaming thermos cup while waiting for the door to open. One year, there was a stampede during the rush buying, and an adult man snatched a carrot from a 4-year-old boy, causing the police to come.

Among the “middle aisle” items that caused a stir were thermal underwear, 300,000 of which were sold in a week, as well as paddle boards, inflatable hot tubs, Lord of the Rings towels and air fryers. When no one in the UK knew what an air fryer was, Aldi was the first to sell an air fryer. Aldi introduced Stollen, the traditional German Christmas bread, and popularized this dessert to the British. Aldi’s fresh food is cheaper than almost all large supermarket chains. The profit of “middle aisle” products is more than twice that of food. The recovery of profits depends entirely on the middle aisle.

“Kevin the Carrot” sells once a year, but people’s love for “Middle Passage” is year-round. Slogans hung and printed on the “middle aisle” – “Once it’s gone, it’s gone”; “If you don’t buy it today, you won’t be able to buy it tomorrow.” They are just daily necessities, but they create a “scarcity” that only luxury goods can have. With such popularity, why not sell more and last longer? Aldi responded: “This is to avoid overstocking and we hate waste of any kind.”

Not being wasteful has even made Aldi a disruptor in the supermarket industry. Amazon and Uber are overturning the book industry and taxi industry, relying on the power of the Internet and smartphones. Aldi seems to be unfazed by new technologies. It does not create a customer database, does not issue point membership cards, does not care about customer preferences, does not care about so-called loyalty, and has no e-commerce services or door-to-door delivery. According to statistics from relevant British departments, the British and Japanese are tied for second place in online shopping, second only to Koreans. Aldi ignores the demand for online shopping and is still based on cost considerations. Every supermarket that has developed e-commerce services has found that the profits of fresh groceries are very low and the delivery costs are very high. It is difficult to make money from online sales. It is just a last resort cost consumption to retain customers. Andy Clarke, the former boss of Asda supermarkets, told a reporter from the Sunday Times that if the big four supermarkets were given another chance, “there would be no home delivery service”.

How did Aldi become a supermarket giant?

Aldi is the abbreviation of Albrecht-Diskont (Albrecht’s cheap grocery store), formerly a small store in the small German city of Essen. In 1913, Anna Albrecht’s husband suffered from emphysema and could no longer dig coal in the mines. In order to make ends meet, Anna opened a grocery store in her hometown of Essen. The two sons Carl (1920-2014) and Theo (1922-2010) helped their mother in the store when they grew up. During the Second World War, both brothers went to war. After returning, they found that their hometown was almost in ruins due to Allied bombing, but their mother’s shop was intact, so they naturally took over the shop and adopted a cheap strategy to speed up the business. Turn around goods, reduce costs, and ensure cash flow to open new stores. In the mid-1950s, the brothers opened Germany’s first self-service store based on the model of the Piggly Wiggly, the world’s first self-service store in Memphis. In 1961, they developed 300 chain stores…

Frugality, low-key, and not spending any money that should not be spent are the life creeds shared by the Albrecht brothers. Today’s middle class may go shopping at Aldi not only to control the cost of living, but also to agree with this creed: “In life and career, restraining desires is a virtue.”

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