Spain: Aldi accelerates store openings with 35% and its focus on Private Label and price leadership
Updated: Dec 7, 2020
Discount Retail Chain Aldi (privately owned and part of the Aldi Nord Group) arrived on the Spanish market in April 2002. It did so timidly and with a model based on the discounting; something that the national market already knew years ago from Lidl, the eternal rival of Aldi (not only in Spain, but also in Germany) and DIA. After almost retreating from the Spanish market, Aldi Nord initially started its new discount market approach and instore concept developments (ANIKo) in Spain. Now finally, the discounter hits the table and accelerates its expansion after closing the year with 328 stores. At the center of its strategy: private label brand, low prices and Madrid as a strategic location.
Aldi Spain accelerated its store opening rate during the pandemic. If the discount chain opened in 2019 a total of 17 stores, which allowed it to increase its retail space by 6.3% compared to 2018, this year the number of new releases has been even higher. "We will close the year with 23 new stores in Spain, which will mean ending the year with 328 stores, more than 5,200 employees (which represents an increase in the workforce of more than 20% compared to the previous year), and more than 350,000 square meters of commercial area in the country", Eduardo López tells Invertia, Head of Aldi Expansion.
As of today, "Aldi has a market share in Spain of 1.4% and more than 5.2 million families trust Aldi for their regular purchases," as recalled from the company through data by Kantar Worldpanel. A ranking in which there are six companies ahead, with Alcampo with 3.4% or regional supermarkets such as Consum being the closest rivals to beat. Higher up, its eternal rival, Lidl (5.7%) and the leader, Mercadona (24.8%).
Private Label Brand
The objective of the chain "is to continue growing" through openings and at a rate of 20 stores per year, but also attracting the public. With a business strategy based on discount, price and private label brand. Eduardo López, head of Aldi Expansion, "Our reason for being in Spain and our commitment to shoppers is offering discount. At Aldi we dedicate all our efforts to developing our own private label brands, which represents 86% of our assortment, and this allows us to maintain high quality at very low prices. During the first half of 2020, Aldi's own private label brand products represented 67% of the company's total sales”, explains the manager.
The German discount chain in Spain has an assortment of nearly 2,000 products and maintains agreements with more than 400 national suppliers. The national products represents 80% of the entire assortment. "More and more customers are opting for staple foods and private labels that allow them to make a complete purchase without having to allocate a large budget," he says.
Within Aldi's expansion plan, the city of Madrid is, with 17 store, the city where the largest number of stores are concentrated. "At Aldi we are currently developing a strong expansion plan in Spain and the Community of Madrid and the capital are, of course, strategic areas for us." The German discounter will conclude its opening plan for this year with the opening of five new establishments in Spain during the month of December. These are two establishments located in Catalonia, another two in Andalusia and one in the Community of Madrid. In total, it will increase its workforce by more than 80 employees.