Three years ago, Ohioans Nicole Papp and Lynne Coristin embarked on a grocery run that would catch the attention of thousands. “We had nearly 10,000 likes [on Facebook],” says Papp. “Before we even got home!” adds Coristin. The pair didn’t know then that their annual “Aldi Aisle of Shame Tour” — a one-day bonanza hitting up various locations of the grocery chain — would become a viral tradition of treasure hunting for gifts, decor, pajamas, plushies, wine, and candy. (“We make sure we buy peanut butter cups and the salted caramels,” says Coristin.) For their most recent tour, the former coworkers and current friends (Coristin officiated Papp’s wedding in 2021) traveled more than 300 miles — for fun LOL — to 13 different Aldi stores in the Cleveland area. (Impressive to be sure, but they visited a whopping 21 locations in and around Pittsburgh a couple of years ago.) Stuffed Pepper Casserole Dressed in matching gray T-shirts decorated with paint markers, they spent 14 hours and an undisclosed amount of money on heavily discounted Wonder Woman dog costumes ($1.49 a piece) and tumblers ($2), plus recipe stands, sculpted reindeer (you know the ones), a three-foot alpine tree, and more. “We didn’t even unload the car ‘til the next day,” says Papp. This level of commitment and fandom typically reserved for the likes of Taylor Swift, Air Jordans, and early iPhone releases, is for — of all things — a discount grocer. “I knew my Aldi was popular,” says Matt Lesky, a former assistant store manager of the Holland, Michigan, store from 2017 to 2021. “But I didn’t realize on a national level the passion people have for Aldi.” The love runs deep, and it’s growing. In the nearly five decades since Aldi opened its first store in Iowa in the 1970s, the company has executed on its shrewd plans to capture American shoppers’ hearts — and grocery dollars. After spending billions to expand and revamp stores, refresh product lines, and remake its brand, Aldi is now the nation’s third-largest grocer by store count, behind only Kroger and Walmart. Aldi wasn’t always a must-stop shopping destination, though. We take a look at how the historically tight-lipped retailer went from niche to number three. But First, What’s Aldi Again? For those just hearing the hype, Aldi is a discount grocery retailer with German roots. It is, by its own admission, a smaller, no-frills place with mostly — more than 90% — private-label (or store-brand) products at competitively low prices. The company claims that shopping at Aldi can save you as much as 40 percent on your grocery bill, although reports say that number is closer to 20. The first store opened in Iowa, but its American origin story really begins in Chicago, the “official launching point into the U.S.,” says Scott Patton, a 28-year Aldi veteran and current vice president of national buying. “The formula in 1976 was simple,” says Patton. “High quality, low price, low overhead, high operational efficiency.” These “limited-assortment stores,” as they were commonly referred to back then, were often located in low-income neighborhoods and sold “only fast-moving groceries at rock-bottom prices.” Meat, produce, and anything that required refrigeration were absent from store shelves — that is, when items weren’t directly stocked on the floor. Food stamps (now Supplemental Nutrition Assistance Program, or SNAP) were accepted; coupons or checks were not. Shoppers bagged their own groceries in their own bags (to much chagrin, at least according to news reports) and carried them to their own shopping cars. This isn’t all that different from how Aldi operates today. Frequent or even first-time shoppers will recognize some of those early hallmark tactics. They may actually find them endearing. Manifesting Destiny It’s no coincidence Aldi went from a little-known store in the Midwest to its 2,348 stores across 38 states (plus Washington, D.C.) today. From the start, the chain set an aggressive expansion pace, opening some 225 stores across the Midwest in just 13 years. Despite the pandemic, which slowed growth for many retailers, Aldi was the fastest-growing grocery chain in the U.S. in 2021, for both the number of new stores and square footage. Even as hundreds of Aldis opened in new cities year after year, shoppers still kinda had to seek them out. The stores were “not in the main shopping centers, but on side streets or in peripheral areas,” writes Brandes in Bare Essentials: The Aldi Success Story, which meant lower rents, and, in turn, further commitment to low prices. They were, however, conveniently located next to competitors that carried popular items not (yet) found at Aldi. In 2017, the company announced even grander plans: a US$5 billion investment to increase store count by nearly 50% to 2,500 by the end of 2022 (it missed that goal), expanding into wealthier neighborhoods, and renovating most of the 1,700+ Aldi stores that already existed (think: roomier, brighter, and slightly more graphic). At an average of 17,000 square feet, these new and refreshed stores are still about a third of the size of the typical supermarket, but that’s 100% intentional: “We want to make sure our building is the right size,” says Patton. “But not too big because every square foot you build adds cost.” A Fierce Approach to Frugality Aldi’s approach to efficiency is not unlike that of a five-time Olympic-gold medalist. Its dedication to keeping operating costs — and, in turn, prices — as low as humanly possible is relentless. Stores are staffed with just three or four people — or only one, if there’s a bad snowstorm or employees call out unexpectedly — who are trained to do multiple jobs and stay on task. Store phone numbers were unlisted (for longer than you might think) — no time or actual phone to answer, anyway! And corralling shopping carts might as well be for the birds. At Aldi, shoppers have to temporarily fork over a quarter to unlock a cart. (Bring the cart back to its corral and the quarter pops back out.) Early on, Aldi put prices on the delivery cartons products came in, instead of the products themselves (a point of contention with legislators in an attempt to limit “the no-frills movement”) to save on costs. You won’t find any meat or seafood counters, and, after a limited test run, the company shelved plans for in-store bakeries — possibly forever. Bucking other widely accepted industry standards, Aldi pinched more pennies by installing checkout scanners and accepting credit cards several years after its competitors. “The scanning technology couldn’t keep up with how fast our cashiers were,” says Patton. (To speed things up further, it added oversized barcodes to the product packaging.) As a manager, Lesky received daily printouts measuring cashier speeds (you’ve probably seen spoofs) and sent staffers home early on slower days. The biggest metric, “aside from ringing,” Lesky says, “is stocking speed.” Aldi doesn’t have overnight stockers, so the staff has “from 5 a.m. to 9 a.m. to stock the entire store.” When he first started at Aldi, his manager taped stopwatches to the grocery pallets and told him to stock the more-than-six-foot stack of items in 25 minutes. “That’s a very ambitious goal,” he says, adding, “it always end[ed] up being more like 35 or 40.” The extreme cost consciousness — at all levels — can be jarring for some. But not repeat customers, who might as well walk around the store (and life) with a flashing neon IYKYK sign over their heads. An Exponential Growth Spurt One of the most beloved characteristics of Aldi stores is what you can’t get. Most supermarkets carry more than 30,000 products — Aldi only now carries 1600 (up from 450 in its early years), which means shoppers can get (almost) everything they need and do it quickly. “You don’t have to weed through the muck of 15 brands of salsa,” says Alyse Whitney, author of Big Dip Energy (out April 2024) and TV host, who grew up with an Aldi in her town, but didn’t shop at one until she went to college in upstate New York. “I get overwhelmed by choices. If there are too many choices, it’s too much for me. So when I go to Aldi, having fewer choices — with a couple of surprises sprinkled in — is really great.” Adding more selection started off small. Aldi first branched beyond its slate of canned goods, shelf-stable snacks, and bags of basic produce (onions, potatoes, apples) and into milk, ice cream (but only two flavors!), and lunch meats in 1980. In the early aughts, store-brand foods began shedding their stigma as “obscure knockoffs” and Aldi got to experimenting. The grocer launched six of its most popular store brands in as many years, including the premium Specially Selected brand (it’s seeing “unbelievable growth,” says Patton), introduced refrigerated produce (which was so popular it caused a backup in the aisle), and swapped out 20% (!) of its entire inventory, increasing the fresh food selection by almost half. Aldi made notable subtractions, too: In 2015, it removed ingredients, like certified synthetic colors, partially hydrogenated oils (PHOs), and more from all of its store-brand food products. Influential shoppers, like Ashley Williams, founder and creator of Oh hey!, definitely noticed: “[Aldi] really solidified themselves as a store where you can have quality products at an affordable price.” Of course, we can’t talk about Aldi without mentioning the glorious frenzy that is Aldi Finds. Located in the center aisle of the store (also lovingly referred to as the Aisle of Shame or AoS), Aldi Finds is “all the fun stuff you don’t intend to buy, but always end up leaving with,” says Lesky. It’s the only aisle Coristin and Papp go down during their Aldi Aisle of Shame Tour, “until it’s time to buy peanut butter cups and salted caramels,” says Coristin. “Then we detour.” The name has evolved over time, but the concept has been around for decades: Items rotate weekly and are very much here today, gone tomorrow. “I bought a tiki drink hat for my dog. I’ve bought a flamingo-shaped bed for my dog. I bought a suitcase that lasted for six years — all from the Aisle of Shame,” says Whitney. (An airline broke it.) “You never truly know what’s gonna be in that middle aisle,” adds Lesky. The FOMO is real and, dare we say, intentional. Among other things, it “makes the idea of going [to Aldi] every week so exciting,” says Sarah Fennel, founder of Broma, a (mostly) baking blog and Aldi ambassador (and fan) who describes the stores as having a hint of Costco, Target, and Trader Joe’s — Costco for the warehouse deal vibes, Target for the finds, and TJ’s for the seasonal/specialty items. It’s also a savvy way for the company to rotate in and test out new products before going all-in. All Eyeballs on Aldi It should be abundantly clear by now that Aldi “do[es] not spend one cent more for decorations, equipment, and facade than is absolutely necessary,” explains Brandes in Bare Essentials: The Aldi Success Story. The company famously spent little on advertising for decades. Top executives didn’t give interviews, either, which meant the company relied heavily on its shoppers to spread the word. And boy did it spread. Open any social media app on your phone and you’ll find countless posts of fervent shoppers proclaiming (mostly) love for Aldi’s flashy new desserts, incredibly priced staples, blink-and-you’ll-miss-it seasonal finds, and ultra-trendy merch. Aldi’s own accounts have millions of followers; “#aldi” has 5.8 billion views on TikTok. The Aldi Aisle of Shame Community, a Facebook Group dedicated to that center aisle, now has 2.2 million members, including Coristin and Papp. (Coristin also belongs to four more Aldi fan groups on Facebook.) Instagram accounts, like ohheyaldi and theamazingaldi, started as a way for shoppers to “have a conversation with mom friends, but just on the internet,” says Williams. They’ve now amassed hundreds of thousands of followers. Shoppers’ fandom has gone from unfamiliar to unwavering in an unbelievably short amount of time: “It went from me telling my friends that I worked at Aldi and them saying, ‘I’ve never been to Aldi — tell me about it.’ to ‘Oh my gosh, I love Aldi, their peanut butter cups are to die for, I go there every week,’” says Lesky, who started posting TikTok videos during the pandemic while working at Aldi. (Years after leaving the company, it’s still his preferred place to shop.) His following grew quickly to 300,000, and while Aldi wasn’t on board with the idea (he was initially asked to shut it down), the company eventually relented and even embraced his newfound celebrity. These superfans have brought in a swell of newcomers, turned converts. In 2019, re-modeled stores saw customer traffic increase up to 40%, according to Patton, and one in five customers who recently switched grocery stores took their business to Aldi — a number that was up significantly from the year before — according to Morgan Stanley. Over a million new U.S. households — across every income bracket — visited Aldi last year (a 10.5% jump in foot traffic). “Even some of my bougiest friends just swear by Aldi’s charcuterie items,” says Williams. While 20 percent of delivery customers have never even entered a store, according to Patton, once they push their quarter-powered carts through Aldi, shoppers find the whole thing to be fast and fun. Year after year, tens of thousands of them vote on their favorite products. “People think it’s kind of cool to shop at Aldi now,” says Whitney. She credits the shift, in part, to people “embracing budget culture and not being ashamed of it.” Where else can you find “the best butter,” better-than-homemade apple pies, and a marble candle pedestal — all for less than $5? “Aldi is the less show-off-y version of Trader Joe’s — it’s not peacocking, just existing,” she adds. Which is a nice change of pace, when you think about it. Read more: The Unstoppable Rise of Aldi | The Kitchn

Lenta, market leader in the hypermarket segment in Russia, re-formatted one of their compact hypers into a so-called Economy store in Ryazan. The area of the store is 4,000 square meters. The assortment includes about 15,000 SKUs and almost 25% of it are private label products. The store was opened on the site of the company's former hypermarket after a month-long reconstruction. In the sales area, the display areas for promotional goods and fresh products have been enlarged. The retail chain has changed the navigation and logic of the display of goods, introduced price tags in large formats to simplify the customer journey, based on the different needs of the buyer. In addition, the store has increased the range of pastries, cakes and culinary products of Lenta's own production. The opening of the second Econom store was a consistent step in the implementation of Lenta's development strategy. The company began testing the new hypermarket format in February last year in St. Petersburg. The store in Ryazan has become the second hypermarket of the "Economy" format. Source: Retail.ru: https://www.retail.ru/news/lenta-otkryla-gipermarket-ekonom-v-ryazani/

Discount Retail Chain Aldi UK, German family owned, has been crowned the cheapest supermarket for your weekly shop by consumer champions at 'Which?'. The German discount grocer was named the Cheapest Supermarket of the Year for 2023 by the group after conducting its annual price comparison of UK supermarkets, looking at the price of groceries and everyday household essentials such as bread, milk and eggs. It is the third straight year Aldi has been crowned and it also won the monthly award a record 11 times in 2023, also topping Which’s list as the cheapest supermarket for December. Aldi managing director of buying Julie Ashfield said:  “We’re absolutely delighted to be named the Cheapest Supermarket of the Year for a third year running. We are committed to providing shoppers with the best quality products at the lowest prices and it’s great to have that officially recognised by a highly respected consumer champion, such as Which?. “As we head into 2024, our promise to our customers remains the same – they will always get the UK’s lowest prices at Aldi.” In a bid to keep up with the grocer’s success, earlier this week Asda became the first supermarket to price match both Aldi and Lidl across hundreds of everyday products. The supermarket is price matching the discounters on 287 comparable grocery products from today, having cut costs by an average of 17% to match whichever discounter has the lowest price on these items. Read more: Aldi crowned UK's cheapest supermarket for third consecutive year - Retail Gazette

Discount Retail variety Retail Chain Woolworth, privately owned, is focusing on growth and continues to expand. In 2024, we plan to open about 40 new stores in Poland, over 100 stores in Germany, and about 30 new stores in Austria," Woolworth announces. In 2023, the German chain Woolworth started operations in Poland. So far, it has opened 13 stores in Poland. Several new openings are already planned for the coming weeks, including the opening of a second store in Warsaw Over the next three months, six new stores will be opened. Around 600 stores in Germany Woolworth is a long-established trading company and Germany's fastest-growing retail chain. It has more than 580 branches in Germany and would like to double the number. Since May 2023, Woolworth has also been present in Poland. The chain's stores are characterized by a diverse assortment of everyday goods. It ranges from decorative items and household items, through electronics, drugstores and gift items, to clothing for the whole family. Woolworth is committed to cost-effective production of a wide range of goods, paying attention to recyclable products and the reduction of packaging material. Woolworth is looking at cities with more than 50,000 inhabitants Woolworth's preferred development sites are high-traffic locations in cities with more than 50,000 residents. The chain is interested in retail premises with a sales area of 800 to 1,200 square meters, well connected, on the ground floor, with parking spaces and a sufficiently large delivery area. "We want to develop in attractive parks and shopping centres, city centres, agglomerations and districts. Of course, we are interested in a well-functioning and attractive retail environment in the immediate vicinity, which we intend to complement and strengthen with our assortment," said Maciej Ćwikła in an interview for SCF News Retailnet.pl said Maciej Ćwikła. Read more: Woolworth wants to open 40 new stores in Poland this year (retailnet.pl)

Portuguese retailer Jerónimo Martins has registered a Slovak website for its Biedronka discounter banner, as well as a number of trademarks in the country, ahead of its entry later this year. Slovakia Expansion Last October, Jerónimo Martins announced plans to expand into Slovakia, to add to its operations in Poland, Colombia and its native Portugal. Jerónimo Martins in Poland In Poland, the group operates more than 3,500 stores, with the landmark 3,500th outlet opening in Skórzewo near Poznań at the end of November. It was developed in line with Biedronka's chain's 'sustainable development' strategy, and was equipped with electronic price labelling, LED lighting along with CO2 refrigeration solutions, in order to enhance the sustainability credentials of the store. Entry into Slovakia would put it head-to-head once again with British retailer Tesco, which is one of the leading grocers in the Slovak market. Tesco exited Poland back in 2020. Source: ESM

Discount Retail Chain Kiwi, a subsidiary of NorgesGruppen, has cut food waste by 55% compared to 2015 and is on track to achieve 60% reduction by 2025. Kiwi relies on automatic product ordering that helps it to place orders as accurately as possible, preventing food waste. Moreover, it is equipped with technology that detects items approaching their expiry dates. These products are either offered at discounted prices or donated to charity. Nora Mile Helgesen, communications manager at Kiwi, stated, "Reducing food waste is one of the most important things we do, because it can have a major impact on the climate. "At Kiwi, we work systematically and purposefully to reduce food waste, and have done so for many years." Measures to prevent food waste Discounts on fruit and vegetables that are about to expire and bread from the day before impact food waste reduction, Kiwi added. Since 2004, the discounter has collaborated with the Church's City Mission to help the needy. Around 40 Kiwi stores donate goods to this organisation instead of offering discounts on goods. These stores donated 10% more goods in 2023 compared to the previous year. The supermarket chain also offers tips on using leftover food in its newsletter as households account for a majority of food waste in Norway. It also works with suppliers to ensure that it offers packs that are adapted to smaller households, instead of offering discounts on quantity. Kiwi is replacing traditional barcodes on food items with 2D codes, which contain, among other things, shelf life information that can help reduce food waste in grocery stores. Source: ESM

Discount Retail Variety Chain B&M kept its full-year profit outlook as it reported a 5.0% rise in revenue over the Christmas quarter, bucking a more subdued outcome across the wider market. The FTSE 100 group, which sells everything from toys to frozen food and garden furniture, said it still expected full year 2023/24 adjusted EBITDA of £620 million (€721.2 million) to £630 million (€732.9 million), up from the £573 million (€666.6 million) made in 2022/23. B&M said in the 14 weeks to December 30, its fiscal third quarter, like-for-like revenue growth in the main B&M UK business was 1.2%. That was a slowdown from growth of 6.2% in the first half. However, B&M said it was a 'strong quarter', given the tough prior year comparative numbers. Operational Execution “The performance across the Golden Quarter has been pleasing, with strong operational execution across the three businesses," commented Alex Russo, the retailer's chief executive. "Our strategy remains unchanged - we are an everyday low-price discounter with a laser-focus in keeping excellence in retail standards and our costs the lowest. This allows us to provide our products at the best price to all customers – many of whom continue to face significant cost-of-living pressures." "Our store pipeline is strong and we will open not less than 45 B&M UK stores in each of the next two financial years, driving disciplined cash generating growth.” Source: ESM

Discount Retail Chain Biedronka, owned by Portuguese Jeronimo Martins, with the start of summer, wants to be as close as possible to its customers. In the last week, as many as 15 new stores have arrived on the Polish map, of which only on Friday (30.06) and around the first July weekend 11 new stores open. In addition, from this week, customers can enjoy comfortable shopping in 14 renovated stores. In total, in all 29 modern locations, in connection with openings, attractive promotions await. Despite the start of the holidays, Biedronka does not slow down. From Friday (30.06) the newly opened Biedronki can be visited by m.in residents of Rotmanka, Przodków, Doruchów, Radziłów, Płońsk, Gościna and Lusówka. Over the past week, as many as 15 new outlets have opened. In addition, 14 modernization works have been completed, including one will welcome the first customers on 1.07. Thanks to this, customers can enjoy shopping in a comfortable and friendly environment, taking advantage of attractive offers and numerous promotions, e.g. in Świnoujście, Sanok, Bydgoszcz or Wodzisław Śląski. "Biedronka is constantly developing, which is why we are consistently opening new and modernizing current stores, responding to the local needs of customers of small towns and large cities. We are glad that we can reach anywhere in Poland, enabling our customers even easier, daily access to the articles they need, in even more comfortable conditions", says Paweł Stolecki, Operational Director at Biedronka. All new and renovated Biedronka stores are created in the latest discounter network standard, i.e. the 3.0 format. Thanks to the introduction of environmentally friendly changes in each new and renovated store, energy consumption is reduced by nearly 15%. Selected facilities are powered by renewable energy, and refrigeration systems operate on the basis of natural gases: CO2 and propane. In addition, the promotion zones are well exposed in the new stores, and the setting of the islands for fruit and vegetables is even more transparent. Customers have the opportunity to purchase freshly baked bread and bakery products from local suppliers. Read more: Biedronka announces a wave of new openings and modernization of new stores – SCF News Retailnet

Discount Retail Chain Biedronka, owned by Portuguese Jeronimo Martins, will soon appear on the next market, such as the Czech Republic (the retail chain Hebe, also owned by Jeronimo Martins, is already active in Slovakia), or Romania, where a few years ago the Jeronimo Martins group tried to buy the Profi grocery retail chain. In the South there is also Bulgaria, and in the East there is Ukraine, where the war will end one day. We believe that an acquisition attempt will appear on the side of Biedronka quite quickly. Building a position from scratch gives the opportunity to standardize, but quickly catching the scale and profitability is extremely important for this business. A quick launch of 100 or even 150 stores will have priority. If in the first year the operator launches a dozen or so stores, and in the following years it accelerates to several dozen (25-40), it will be possible to say that the network has properly prepared for expansion and has a chance for success. Slovakia has a population of 5.4 million inhabitants. The market, compared to Poland, is small, but next to Poland. The Biedronka brand is very recognizable in Slovakian border regions, the discounter can also draw many synergies with domestic business (operations and logistics or assortment (which of course will have to be adapted accordingly). Due to its format, Biedronka can be in Slovakia, a so-called game changer. In Poland, the company is opening not only 600-1000 sq m stores, but for several years it has been opening several dozen stores with an area of 400-500 sq m. dedicated to smaller towns and rural areas. If the Biedronka decides to replicate competitor`s grocery retailer Dino's strategy on the Slovak market, it can win. In this context, it is worth taking a look at the chains that dominate there, i.e. the aforementioned Lidl, Tesco, Kaufland, Billa and Makro. Most of them are large hypermarket and supermarket formats. Biedronka knows them all perfectly, which is also not without significance for the success of this mission. Who will stop Ladybug? Is there anyone who can stop the expansion of Biedronka to the South and its conquest of the Slovak market? There it is! The real competition for Biedronka will be Coop Jednota. This grocery network of cooperatives generated in 2021 a turnover of over EUR 1.6 billion and currently manages around 2,000 stores throughout Slovakia, mainly in rural areas and smaller towns. An extremely efficient and dynamic operator, whose role on the Slovak market can be compared to Dino. Biedronka has its own loyalty program, develops its own private label brands, but above all offers its customers modern stores with a good shopping experience. Will Biedronka disappear Tesco? And what will happen to Tesco? According to one of the experts, the British operator is one of the largest, but at the same time the weakest market participants in Slovakia. The entry of Biedronka may be one of the key factors that will make Tesco disappear not only from Slovakia (after Tesco left Poland), but also from the whole of Europe Central. Of course, the main reason will be what caused the company's problems in Poland, i.e. the lack of quick adaptation to changing conditions and duplication of strategies from the British market. Read more: Ladybug scares Tesco again. Will entering Slovakia become a game changer and throw the British out of another market? - Commercial News (wiadomoscihandlowe.pl)

Portuguese supermarket group Jerónimo Martins expects to open its first stores in Slovakia at the end of next year in an expansion of its Polish chain Biedronka. The Slovakia store results would be reported separately from Biedronka, chief financial officer Ana Luisa Virginia said, adding that it was premature to provide any guidance for investment and sales of the unit. "We are talking about an operation done from scratch, we are not disclosing much," she said on a conference call with analysts. Cross-Border Shopping The company's interest in the central European country was first reported in March, when the head of the Polish Biedronka, Luis Araujo, said that many Slovak consumers were already crossing the border to buy at Biedronka, and the company had been "looking carefully at Slovakia" for expansion. Besides Portugal and Poland, Jerónimo Martins is present in Colombia, where it operates a store chain called ARA. Potential Expansion The CFO did not rule out a potential expansion to Romania, a market that has been on the company's radar for years , but noted it was not a priority. "It would only be (a priority) if we decided that we would have the right target at the right price," she said. "Currently, we want to concentrate on Poland, on ARA. So, it's not really a priority." Jerónimo Martins reported a 28% jump in third-quarter net profit, driven by a robust increase in sales at Biedronka, although its profitability narrowed slightly on cost inflation and discounts. According to JP Morgan analysts, the results were better than feared at Poland's market leader Biedronka, which justified the rebound in the shares following recent underperformance. Source ESM

Last week number 1 Discounter in Uzbekistan, Havas, opened 6 stores at the same time, reaching 310 stores in their network. Source: Havas #smartdiscount #havas #uzbekistan #tashkent #discounters #growth #smartdiscount #discount #discountfoodretail #discounter #foodretail #retail #drc #consultancy #discountretailconsulting #retailconsulting #consulting....

Fireworks have a long tradition in many countries. While Germany welcomes the New Year with fireworks, in the USA the 4th of July, in France the storming of the Bastille on 14th July and in England the Guy Fawkes Day on 5th of November are occasions for private and public fireworks. According to the Association of the Pyrotechnic Industry (CPI), New Year's Eve fireworks worth 180 million euros were sold in 2022 (137 million euros in 2018 for comparison), a new sales record after a forced break in previous years. However, the share of total consumer spending of 1921.6 billion euros in Germany is very small at 0.09%. In 2020 and 2021, fireworks were not allowed privately on New Year's Eve due to the Corona requirements and only achieved 20 and 21 million euros in sales from events in the industry, respectively. The decline in sales plunged the industry into existential problems, with state aid also being used. In 2022, hardly any fireworks were imported, as the warehouses were still filled with the unsold fireworks from 2020. The fireworks were stopped by the authorities on 22.12.2020 shortly before the sale. However, the goods were already at the retail trade and had to be picked up again by the suppliers for a fee without turnover. 90% of the total turnover of the fireworks industry is sold in the last three sales days of the year. Only party fireworks may be sold all year round, but have only a low sales significance. The supply structure corresponds to a classic oligopoly with only three suppliers and many large and small traders on the demand side. However, demand is concentrated in a few retailers and one can therefore almost speak of a bilateral oligopoly. Comet from Bremerhaven had sales of around 50 million euros in 2022, which corresponds to about 30% market share. Since 2005, Comet has been part of the Hong Kong trading house Li & Fung, which is active in over 40 countries worldwide. With its sister company Shiu Fung Fireworks, the value chain in sourcing extends directly to China. In 2013, the company Keller Feuerwerk was taken over, so that only three suppliers remained in the market. Nico, based in Berlin, is the smallest of the three suppliers and sells a wide range of batteries, rockets, mixed, bang and light ranges. Nico opened an office in China in 2016 in Liuyang, in order to increase the proximity to the production markets in order to take advantage of better and faster communication. Nico is estimated to have a 10% market share in 2022. After a loss-making financial year 2020/21, a small profit of EUR 0.8 million was again achieved in 2021/22. Weco from Eitorf is the market leader with a market share of 60-65% and a turnover of 100 million euros in Germany and also active in other European countries with its own subsidiaries in Austria, Switzerland, France and the Netherlands. The product range includes rockets, batteries, sparklers and large fireworks for events. Weco is owned by the managing partners. In the last published financial statements of FY 2018/2019 before Corona, a trading margin of 32.8% and an EBIT margin of 2.6% were achieved. With the exception of Weco, which has a share of 15% in Germany, production only takes place in Asia and here in China at the Eitorf and Kiel sites. The number of potential producers in China for a global market has steadily decreased in recent years, deteriorating the bargaining position of the three importers. The goods are already ordered at the beginning of the year, after the sales figures are available, the negotiations have been concluded and then successively imported from Q2 with the peak in Q3. Shipment as dangerous goods (hazard class 1.4) is time-consuming and expensive and takes place over a large number of shiploads. Not all shipping companies are open to this type of dangerous goods. At Comet, there are 600 containers spread over the year. The goods are successively stored in Bremerhaven with 40,000 pallet spaces. The balance sheets of the three importers are characterised by an inventory of goods at the beginning of the year due to returns from the trade and from Q2 onwards the successive build-up of the inventory through imports or, in the case of Weco, in-house production. Delivery then takes place to retailers in December, and there is an exchange of commodity items for trade receivables in current assets. Depending on the payment term, the cash inflow will then take place in Q1 of the following year. The inventory is usually counter-financed at short notice by bank loans with matching maturities. Only Weco owns fixed assets in production facilities due to its own production. In terms of fixed assets, rented and own storage space is also required, which must be designed for a maximum of the entire annual turnover. After all, the velocity of goods in circulation is only 1 per fiscal year. As a rule, the delivery does not take place via the company's own logistics, as this is not needed except for December. There are special service providers in the logistics industry. Due to higher costs in production and logistics, importers' sales prices have increased by up to 70% for individual products compared to 2022.These price increases are passed on to the end consumers, but not always 1:1. In some cases, products are replaced by substitute items, so that the price increases are not necessarily visible due to a lack of comparability. The Kopernikus 86 shot battery at Aldi-Süd and Aldi-Nord cost 12.99 euros in 2023 compared to only 8.99 euros in 2022 (=44.4% price increase in the UK). The oligopoly has existed for years. New entries and retailers' own imports are not possible due to significant market entry barriers. All products sold in Germany require approval from the Federal Institute for Materials Research and Testing (BAM). Often, identical products with identical approval numbers are sold by different retailers with individual packaging and presentation in order to achieve differentiation for the customer. The naming ranges from Van Gogh and Copernicus to World Champion and Rocket Clash to imaginative names such as Firecracker Inferno and Phantoms and Ghosts. In retail, most retailers only rely on one or two of the three providers as suppliers (= mono- or dual-sourcing). Lidl marketed 47 (36 Weco, 11 Nico) different items with price ranges between 3.99 euros and 37.99 euros plus 4 table fireworks products. Comet had already delivered displays with table fireworks to Lidl at the beginning of December. Lidl was the only retailer to purchase goods from all three importers. Nico managed to get back into work at Lidl after many years of being ignored. Aldi Süd had 36 items (36 only Weco) starting at an aggressive 2.29 euros for the entry-level battery up to composite batteries at 34.99 euros with 206 shots. The large-scale discounter Kaufland sold 39 items (21 Comet, 18 Weco) and an additional 9 products with youth fireworks. The price differentiation was most pronounced here with the entry-level battery with 20 shots for 2.99 euros up to two composite batteries for over 100 euros retail price. 80 fireworks items were announced in the advertising, but not all of them were shown in the leaflet, a rather unusual approach to communication. Sales are very labor-intensive and cost-intensive for retailers. Additional mobile storage space often has to be rented for storage. Stock in the sales area is strictly limited and must be constantly replenished. Safety regulations are comprehensive. There are always special situations in the areas near the border. Fireworks are not freely available for sale in Alsace and the LEH branches near the border have additional customer groups here. In contrast, products from Poland are also imported privately in the areas near the Polish border. In Switzerland, higher weight classes (rockets up to 350g, in Germany only 20g) are permitted and are also interesting for some of our customers. These imports fall under the gray market without legality and are not recorded. The fireworks are always sold to retailers with the right of return. This is a classic commission business. The sell-off risk lies solely with the importers. Deliveries are decentralised and do not pass through central warehouses due to the high volume of explosives. In the first weeks of January, the return delivery and safe storage will again be carried out in a decentralised manner by the three providers with their sophisticated logistics for dangerous goods. DIY stores such as Hornbach, Bauhaus and Obi (all three since 2020) have already stopped selling fireworks for several years for sustainable reasons. Toom, on the other hand, remains on the market. 18 items (18 Nico) and an additional 3 children's fireworks products were offered. The market shares of DIY stores are very low compared to food retailers, so that purely economic considerations also played a role in the renunciation. Customers buy fireworks where the other products for New Year's Eve are also bought, and that's not in the hardware store. There is a lack of frequency here. Drugstore chains such as dm only sell party and decoration items for New Year's Eve and not fireworks. In addition to the discussion that has been going on for years about the usefulness of fireworks and about health risks (including deaths) due to improper handling, the topic of sustainability is becoming increasingly relevant. In terms of sustainability, the industry is on the right track with the reduction of plastic content in products, the use of recycled materials, the use of green electricity and its replacement with cardboard. However, it is not possible to recycle the spent products. These are usually collected and disposed of at great expense by the respective city cleaning service. The costs are borne by the taxpayer. In addition, in the case of fireworks, attention is drawn to the very high particulate matter pollution and noise pollution with impairment of residents and animals in the argumentation against fireworks. According to Nico, however, the share of fireworks in the total amount of particulate matter in Germany is only 0.7%. Production in the factories in China is mostly BSCI or SA-8000 certified. New Year's Eve fireworks are and remain one of the most interesting, but also most controversial product groups in the retail sector. Read more: Fireworks Sales - Competence Network Retail (handel-dhbw.de)