Updated: Jul 17, 2021
Discount Retail Chain Aldi Portugal (family owned) plans to reach 200 stores in the country in four years. For this year, the goal is 15 new stores, with an average investment per space between four to six million euros (US$4.8 - 7.2 million).
Next year, the retailer opens Moita's new logistical surface and is currently looking for a location to the north to shell out Euro 45 million (US$54 million) on the construction of a new warehouse. “We have an ambitious expansion plan: we are going to explore new store formats, in more urban areas, in order to be able to serve and reach more people, in a more convenient way”, reveals Vicente Moreno, vice CEO of Aldi Portugal, in an interview with Hypersuper.
The discount chain of German origin opened on June 16, in Lisbon, the first store in a proximity format. The store, located in the Picoas area, is based on an urban concept of proximity and convenience. First impressions are positive. “Through this new format, we were able not only to strengthen our presence in urban centers but also to serve customers more conveniently and with an assortment adapted to the daily demand of these centers. We can say that the affluence and generalized feedback left us very satisfied”.
How do you assess the first six months of Aldi Portugal's activity? How did the main business indicators evolve?
Our main objective in these first six months was to keep our teams motivated so that we could continue to satisfy and respond to our customers' needs during this difficult phase of the pandemic. Since this indicator was successful, I can say that the balance we make is, without a doubt, positive and achieved through the efforts of our team, which makes a difference every day.
How has the pandemic context influenced or is influencing Aldi's performance in the Portuguese market?
The pandemic context experienced introduced significant changes in everyone's life, namely in the behavior and form of consumption of each one. At a time marked by uncertainty and fear of contagion, consumers turned to brands and products with which they felt more familiar and, consequently, which they considered more “reliable”. The purchase frequency decreased, but there was an increase in the number of products purchased per basket, at each visit. Outing for shopping became less frequent and more efficient, focused on a quick visit, to the detriment of thoughtful shopping. As the measures were eased, people yearned to regain some normalcy. Demand for physical stores, mainly in certain sectors such as retail, food trade and pharmacies, remained relatively stable. In our case, some categories even registered an increase in sales, obviously justified by the need that people had to spend more time at home and, consequently, cook their own meals. At the beginning of the confinement, in March of last year, there was an increase in demand for products with a longer shelf life, such as canned goods, biscuits, pasta, rice and frozen foods, among others, as they are products with greater durability. and, in these articles, promotions ended up playing an important role in the purchase decision. However, since we learned to live with the pandemic, the demand for durable food products has stabilized, having been replaced by products that contribute to a more balanced and healthier lifestyle, with emphasis on organic and fresh products. In addition, we realize that, increasingly, consumers are predisposed to buy products from brands that demonstrate a real concern with environmental and social issues, such as combating food waste, If there is a lesson we have learned from the pandemic, it is that the key to success in this sector, without a doubt, is to adapt quickly to the circumstances. There is no theory that allows us to predict which direction consumer trends will take. At Aldi, we are concerned with listening and understanding how we can make a difference. We want to meet the demands and desires of our customers, offering them what they need. This is our starting point and this is the principle by which we operate.
Taking into account the main economic and social indicators in the country, how do you expect the business to evolve by the end of the year?
We continue with our long-term perspective and are confident in the strategic priorities we have defined. More than retailers, we know that we are colleagues, friends and neighbors. We are committed to our employees, customers and partners, and we are determined to see it through to the end.
Aldi has been intensifying the pace of opening new stores and opened in June, in Lisbon, the 93rd store in the Portuguese market. What is the reason for this reinforced investment in the Portuguese market for expansion in recent years? Portuguese consumers are increasingly demonstrating that they identify with us, not only in terms of offer, but also with regard to our values and way of acting in the market and in the community. 15 years ago we arrived in Portugal determined to offer high quality products at very competitive prices to Portuguese consumers. Since then, we have followed our path carefully and strategically: we have grown, reached new locations and strengthened our presence in places where we were already known and where people were asking for new stores. In addition, we have invested in our brands and reinforced the offer of national products in order to continue to respond to the needs and demands of Portuguese families, and the feedback has been very positive. Proof of this are the various awards we have won: Flavor of the Year, with 22 products distinguished in 2021, Superbrands, Escolhas DECO, and more recently, our brand GUT BIO was elected Consumer Choice, as the best organic food distribution brand. We recently opened our first proximity store in Picoas, Lisbon. Through this new format, we were able not only to strengthen our presence in urban centers but also to serve customers more conveniently and with an assortment adapted to the daily demand of these centers. We can say that the affluence and generalized feedback left us very satisfied.
What is the expansion plan designed by the end of the year?
We currently have 93 stores and we expect to end 2021 with 15 new surfaces, so we will surpass 100 stores in 2021.
Is this pace of openings to continue in the coming years?
We are in a clear phase of investment and investment, with a view to strengthening our position, both in terms of sales surfaces and supply structures. We want to reach new geographies where we are not yet present, but we also intend to strengthen our presence in relevant cities, where we are already represented.
How many stores do you plan to open on term? Taking into account the openings, how many jobs do you plan to create?
We have an ambitious expansion plan: we are going to explore new store formats, in more urban areas, in order to be able to serve and reach more people in a more convenient way. 250 is the number of stores that we intend to reach in a short period of time, providing, in this way, many new features for customers and employment opportunities for local communities. One of our main goals is to reach 200 stores by 2025.
From a geographical point of view, what are the plans to expand the insignia?
Our priority is to reach more and more Portuguese consumers, conquering new geographies where we are not yet present, but also, and as I mentioned, reinforcing our presence in strategically relevant cities, where we are already represented.
What is the average investment made per store?
The average investment per store is between four and six million euros (US$4.8 - 7.2 million).
They have also been strengthening the focus on national production. Can you tell us what the chain has been doing to increase the offer of Portuguese products in its stores?
Since our arrival in Portugal, we have been investing in the evolution and innovation of our assortment, not only in terms of our own brand, but also in the offer of products of national origin. To meet the needs of the Portuguese market, at Aldi we seek to privilege national producers in various categories, such as fruit and vegetables or fresh meat, which, in this case, already has, for the most part, products of national origin. Responding to the needs and consumption patterns of the Portuguese consumer and supporting national production are priorities. Over the years, we have been intensifying our commitment to Portuguese consumers, by investing in true partnership relationships with local producers and suppliers. Today, we can proudly say that we are of German origin, but we feel Portuguese. On the other hand, this support to local producers ends up being in line with our sustainability commitments, since the offer of “made in Portugal” products also contributes to the reduction of the levels of CO2 emitted, as travel is avoided longer.
How much does it represent in percentage terms the national products in your offer?
The bet on national production has been a growing commitment by Aldi Portugal. We have sought to find suppliers that meet the quality and demand criteria by which we operate. The percentage of Portuguese products varies depending on the category and the supply capacity of the producers. For example, all our fresh eggs are of national origin. In terms of fresh meat, we are talking about the majority of the offer and in bulk fruits and vegetables this figure already exceeds 70%.
And the private label, how much does it represent in percentage terms in the offer?
Globally, our own brands represent more than 80% of our offer.
In strategic terms, what is the role of private label in your operation in Portugal? Our positioning is based, above all, on offering exclusive branded products, of high quality and competitive prices. What distinguishes us from other chains is, essentially, the high quality of the products of our brands, the wide range of food and non-food products with limited stock, available weekly, and the strong commitment we have been making in categories such as products fresh, organic, vegetarian and vegan, gluten-free and lactose-free, which meet the new demands of consumers and provide a true discovery experience. We want to be seen and perceived as a trusted, familiar and close brand, whose exclusive and high quality products can be purchased by anyone, always at affordable prices. We want consumers to also recognize us for our commitments in the field of citizenship, ethics, sustainability, work environment and responsible behavior. We recognize that, in some specific categories, the Portuguese consumer is still not comfortable consuming the distribution's own brand and, as a result, the manufacturer's brands continue to feature in our assortment.
They designed a new store concept. Can you explain what it consists of and what the purposes of the new layout are?
The food retail sector is constantly changing. Today, people can easily acquire what they need from anywhere. Our mission is to offer the Portuguese, everything they need, for their day-to-day, quickly and simply. Recently, we implemented an evolution in the concept of organizing our stores, where the focus is on the fruit and vegetables area, a category that is now highlighted at the store entrance, conveying an image of freshness and variety, in this one of the categories where we've been focusing in recent years. On the other hand, promotions, weekly opportunities and themed weeks, such as the weeks where there are highlights for characteristic products from Brazil, Italy, Mexico, among others are now concentrated in the center of the store, thus facilitating , the discovery of new products and flavors. With this new layout, we intend to facilitate and provide a simpler and more pleasant shopping experience for customers, who can now have greater prominence and ease of access to the most popular categories, spacious and bright spaces and a clear identification of products.
In early April, did you establish a partnership with Glovo to deliver parcels? How's it going?
The Glovo model fits the discount Aldi principle, where we focus on simplicity and what is essential, always with the customer in mind. The intuitive ordering process and fast delivery that Glovo offers correspond to this principle. Customers highly value the fact that there are practical solutions for when they are unable to go to our stores or simply forgot to buy a product, on their last visit to Aldi. The delivery model through Glovo is fast and convenient and offers an answer to this need.
Initially, it is available in some areas of greater Lisbon. Are you planning to expand to new cities?
We currently have a home delivery service available through Glovo, in the store areas of Alfragide, Massamá, Telheiras, São Domingos de Rana, Amoreira, Arroja, Laranjeiro (Almada) and Picoas.
Are you planning to extend this partner network to other door-to-door delivery apps?
For the time being, we do not foresee new delivery partners.
Does Aldi have plans to launch an e-commerce project in Portugal? How does the company face the investment in online commerce through its own store?
As a member of the Aldi Nord Group, we are attentive to market and consumer trends, so that we can respond to our customers and exceed their expectations, providing them with a simple, fast and pleasant shopping experience. For the time being, we have no date forecast for a bet of this kind.
Last year they launched the first advertising campaign in Portugal. What was this bet due to?
At the beginning of last year, we started taking the first steps towards a communication approach closer to consumers. With the entry on social networks, the launch of the first national campaigns on radio and television and the new signature “Aldi makes a difference”, we came to reinforce our position, which stands out, simultaneously, for the daily concern to offer quality products at prices accessible and, also, for our posture and way of acting in the market. Meanwhile, this year, we launched three new campaigns: one dedicated to key grocery products, another based on the quality of our fresh produce and the last one, more recently, to communicate our own brand of organic products 'GUT BIO' which was elected “Consumer Choice 2021”, in the category of best organic food distribution brand. For this year, we have a few more campaigns planned. We have many ideas and actions that we want to develop and share with our customers.
Has the logistics center in Moita, target of an investment of euro 60 million (US$72 million) with the creation of 300 jobs, already started operating?
Moita's new logistics area is scheduled to open in 2022. This distribution center will allow us to look at the supply chain in a different way and will bring a new range of possibilities in terms of supply flows to stores, reducing store supply timings and providing a new organizational level within operations, which will be reflected in the optimization of the level of service provided. In this way, we are able to bring supply times closer to the customer's purchase, in order to have the right product in all our stores, in the right quantity, at the right time and with maximum freshness.
How many warehouses and logistics centers do you have to support the operation in Portugal? What investments have you made to modernize the spaces?
In addition to Moita's logistical surface, we are currently looking for a location to the north, for the construction of a new warehouse, in an investment expected to be around 45 million euros.
What is Aldi Portugal's turnover in 2020? What is the expected variation this year?
One of our goals is to grow above 25% over the next few years.
How many employees does the company have in Portugal?
At the moment, we are about 2,500 employees. But since we intend to continue to grow in terms of stores and logistical surfaces, we will necessarily have to strengthen our teams.