The Success of Aldi and its Private Label Domination

Aldi is a discount grocery store, which is known as the fifth largest supermarket in Britain. It has over ten thousand stores in eighteen countries and has a €50 billion combined turnover which increases as the clock ticks. The aisles and trolleys at Aldi are always filled to a brim.

 

Selling their products at a discounted price is not the only reason behind Aldi’s huge success. Most of the times, people associate low prices to low quality. In the start, Aldi had to face the criticism and backlash for being cheap, it was said that their products are of poor quality and only people who cannot shop elsewhere, purchase at Aldi’s.But later, Aldi rose to immense and rapid success. Aldi has won numerous awards. In the United Kingdoms, they have won the Supermarket of the year for two consecutive years and then they also wonthe Grocer of the year award as well and a lot more.

 

Although, selling their products at a cheaper price one of the reasons behind the success of Aldi but it is a minor one, since, a new product at a low price has to prove its worth in front of all the other tested and trusted products. One of the biggest reason behind the success of Aldi is that it narrows its attention and specialises in only one thing and remains devoted to it. Aldi specialises in staples such as food, beverages, sanitary items and other products that are used in households. Aldi mostly sells its own products and only sells a limited number of other brands. This gives them the leeway to decide their own market strategies and prices of various products. This lets them use multiple barcodes on products instead of price tags, which speeds up their checkout process. They sell a total of 1500 lines in comparison to the other supermarkets which keep a stock up to 40,000. This strategy gives them a sense of exclusivity and allows them to concentrate on the efforts of producing the best products and creating the best brands and helps in offering a greater value to their customers as compared to their competitors.

 

Aldi also does not accept manufacturer’s coupons, so that saves Aldi from unnecessary sales which hinder their business. But they do have special weekly offers in which they sell expensive items like electronics, appliances, tools, computers on discounted prices.

 

In Germany, Aldi has an unusual policy of not advertising about their sales or their products. They do inform their customers about them through newsletters, direct mail or by printing it in the local newspaper. They have never used external advertising companies and claim it saves money and conveys the necessary information to their customers in a more feasible way.

 

Aldi’s are known as the magicians of minimalism due to their business style and motto, which is ‘cheaper, simpler and better’. Since, they only specialize in home staples and majorly sell their own brands, they have reduced the power of choice for customers, which saves them from a lot of decision making and unnecessary anxiety. This helps them in leaving the place within minutes which saves a lot of time for the customers. Instead of wasting their precious time with brands and fighting them over prices, Aldi has created its own brands and only does business with other brands for specific products only.

 

A lot of stores offer a lot to their customers, but Aldi has introduced something very refreshing to the customers by offering them less. This is the main ingredient behind Aldi’s success in creating brands and as long as Aldi follows this minimalistic structure devotedly and obsessively, they will remain successful and might even grow further. All the success that Aldi has earned, is due private label products. These private label products have given Aldi the opportunity and facility to grow by giving a leeway in pricing and marketing strategies. So, if you want your business to be a big success like Aldi, you should also invest in private label products.