Enterprise Marketing & Promotions Management

Aldi…Aldi…Aldi…

By / May 2017

Insights

Competitive Threat?

If you are in grocery retailing, it seems like all you hear about these days is Aldi; Small stores, limited selection, low prices … really low prices!

Look at this comparison price market basket comparison-shopping recently conducted in the Minneapolis market:

Aldi – $70.05                                Jerry’s Foods – $119.07

Walmart – $86.59                       Kowalski’s – $127.43

HyVee – $107.23                         Lunds / Byerlys – $131.67

Target – 107.82                          Whole Foods – $163.80

Fresh Thyme – $108.29

Cub Foods – $112.27

Trader Joe’s – 119.05

Aldi is 19% below Walmart and 36% below the combined average price of the 10 market competitors. However, price alone is not the only factor. The key to survival is to understand your store as the hub of a consumer’s ecosystem, not merely as an asset singularly fine-tuned for productivity.

Game … Set…Match?

Customers today have choices…retailers do not ‘own’ their customers… their customer’s own them. The best way to serve your customers better than anyone else is to know them better than anyone else. Then … develop the ability to sense and respond. Give them what they want!

For the last 15 years, Prosper Insights and Analytics has been asking survey respondents where they shop for groceries and why they shop there. Prosper surveys over 7,000 people per month in a statistically balanced survey.

The left chart compares All of the respondents to Aldi shoppers. The right chart compares Aldi Shoppers to Wegman’s shoppers. Both are very successful retailers Aldi is Price. Wegman’s is Customer Experience. The charts illustrate the point that consumers make value judgements and seek a retailer that senses and responds to their needs.

The Aldi Antidote—Sense & Respond

Know your customers better than anyone else! Serve your customers better than anyone else!


Contributed by Ron Lunde, Senior Marketing and Advertising Executive & Market Strategy Consultant

Ron held senior management positions in grocery retailing including Supervalu, Grand Union and Price Chopper. He was also a Sr. VP. at the Leo Burnett Advertising agency. Ron is credited with introducing Space and Category Management systems to the industry as well as working with the Price Chopper team to introduce and deploy the first data driven frequent shopper program in the US. He was also a consultant to the Financial Accounting Standards Board in developing the Issues that govern the accounting requirements for all trade promotion and marketing expenditures. Lunde currently serves as a Market Strategy consultant to retailers and CPG brands.

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