A Shopping Trip to ALDI

To ALDI, and a look at what all the excitement is about. Latest figures from research company Taylor Nelson Sofres say that discount stores in general and ALDI in particular are growing sales at a great rate as cash strapped shoppers flock to take advantage of their low prices.

German owned ALDI is the biggest of the discounters with a market share of 2.9%, which compares with 31% for Tesco, 17% for ASDA, 16% for Sainsbury, and 11% for Morrisons. Whilst relatively small their sales have grown by 19.5% in the 12 weeks to July 13th, compared with a total grocery market growth of 7.3%. ALDI says its success is due to always selling at very low prices, something they are able to do, according to their UK head of buying Tony Baines, because "we have a low cost base, and take lower profit margins" (than the major multiples).

So what is it like shopping there?

Immediately you can see why their cost base is low. Trolleys are chained, and have to be purchased, with money refunded when they are returned. So no extra staff are required to collect them up. The aisles are narrow, all the better to pack more in to a limited space, saving on building and maintainance costs Products are left in their outer boxes on shelves, not taken out of the box and displayed individually, so again fewer staff are needed. There are far fewer checkouts, so far fewer staff are required to man them. Yet you don't queue for long. They whip you through very fast. First, because you are not allowed to hold things up by packing at the checkout, instead, you unload your products on to the belt, they are scanned, and you put them straight back into the trolley. Second because the belts are about twice as long as conventional belts, so there's no waiting to unload the trolley. And finally, although I have no evidence for this, the staff could be paid on the speed of scanning the goods, which went through the checkout like lightening.

What about the products?

ALDI stocks just 11 well known brands. The rest of their goods have got brand names, but ones few will have heard of. So ALDI is not paying typical national brand prices for their packaged products. Most of the fresh produce is sold under a little known name, the meat and chicken for example is called "Ashfield" . In just a few instances, ALDI puts its own name on fresh produce, something they want to do more of apparently to create a better quality image.

The range of goods on offer is very limited, which means less cash tied up in stock. But the basics are there.

What about price and quality?

Prices varied. 500kg of British beef mince was £2.29p compared with £2.25p at Tesco and £2.20p at ASDA. But sirloin steak, also British, was £14.68p per kilo compared with £15.47p at the big chains, strawberries were £1.69p compared with £1.99p, and new potatoes, on special offer, were 69p per kilo compared with £1.38p.

Taste wise, the strawberries, mince, steak, and tomatoes were as good as any other supermarket's, the potatoes better than a recent Sainsbury purchase.

Will ALDI become the new face of grocery shopping? It certainly offers good value on some products, which, for those on a very strict budget, could be most welcome. However, the limited range, lack of brands to which many are very loyal, and the feeling that, whether grappling with the chained trolleys to being hustled through the checkout, it is an even bleaker shopping experience than at other supermarkets, makes me think that many will shop there once but not go back. Added to this the big supermarkets have started major price wars which will make them more competitive with ALDI and its fellow discounters, at least some of the time. Discount shopping won't go away, but its probably not going to dramatically change the UK shopping world.