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Germany: Aldi wants higher sales, lower prices, smaller stores

Discount Retail Chain Aldi Nord recorded a 7.5% increase in sales last year, thanks to its international expansion. The German discounter does not have large profits, but this does not prevent the retailer from focusing on prices.


  • Aldi will pursue a more aggressive pricing policy. After years of reorganization and modernization, which have put promotions on the back burner, the discounter finally wants to be a discount store not only in name.

  • Now investments are starting to pay off, and profits in 2023 have increased significantly.


Aldi's exit from Denmark is a good decision

In all countries where Aldi operates, EBIT was positive last year, although this is partly due to the fact that Aldi also owns a number of its properties. In 2023, the chain put an end to its loss-making operations in Denmark. In France, the retailer is still fighting for share, and in its home market of Germany, it is still feeling the investment costs incurred.


Focus on foreign markets

Aldi Nord's net sales reached €29 billion, an increase of 7.5 percent. In addition to its strong expansion, the discounter opened almost 100 supermarkets outside Germany, the increase is of course due to high inflation, but according to GfK, Aldi still performed better than the market. The company also increased its market share in all countries. The German domestic market generates more than €6.2 million in net sales per store for Aldi, while the figure remains lower abroad, according to retaildetail.eu.


By 2024, Aldi Nord plans to open 200 new supermarkets, including 60 in Poland. However, the new locations will be smaller and cheaper to build: instead of 1,100-1,200 sqm. Aldi Nord is now planning 1,000 sqm. of store size. The discounter is also reorganizing its offer to focus even more on private labels and reduce the assortment to about 1,800 items.


Aldi is strongly committed to its own private label brand

As from July 1, Alexander Lauer will take over the position of Purchasing Director at Aldi Nord. Lauer worked for the rival Lidl until 2020, but will now take over from Jürgen Schwall. The discount maker wants up to 80% of its own brand assortment to go to foreign markets. Today, only half of all products come from the headquarters, from the headquarters in Essen.


Aldi also focuses on the promotion of products under its own private label brand. In Poland, the chain launched the Great ALDI Product Test project in May. As part of the campaign, customers can become testers assessing the quality of private label products. The ambassador of this event is Michał Korkosz author of cookbooks and the blog Rozkoszny.



 

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