"Aldi has changed dramatically": is the discounter losing touch?

Many supermarkets and discounters benefited from the Corona crisis, groups such as Edeka, Rewe or Lidl grew in double digits in some cases. At Aldi, on the other hand, sales fell compared to the previous year. Has the group got bogged down? An analysis by Anna Schmid.
Is Aldi in trouble? If you believe industry experts, the discounter is losing a lot of ground to the competition. An article that "Manager Magazin" published a few days ago bears the provocative title "Aldi's crash".
In it, the authors describe a group that has been left behind. A company that has lost face over the years. "Aldi has changed dramatically," the newspaper quotes former Aldi Nord manager Dieter Brandes as saying. "This is the journey from a once-excellent company to an ordinary one, a company on the way to the supermarket."
The discounter mentality that Aldi used to have has faded more and more over the years. Just like the success of the group. The "Manager Magazin" refers to insiders, according to which Aldi's sales in Germany fell by around one percent in 2021. And the market share also shrank, as the discounter connoisseurs told the newspaper.

Lidl has overtaken Aldi in several areas

Aldi connoisseurs: sales of the discounter fell in 2021.


Current data support these assessments. Apparently, Aldi did not benefit as much from the Corona crisis as other food retailers. Edeka, Rewe and Lidl grew in double digits in some cases. This is particularly explosive because Lidl is in direct competition with discounters from Aldi.
As the "Handelsblatt" reported in September 2021, the turnover of the Lidl Foundation rose from 56.8 billion euros to 62.3 billion euros in the 2020/2021 financial year. Lidl also managed to overtake Aldi Süd in terms of space productivity. As can be seen from the Hahn Group's Retail Real Estate Report, the discounter recorded gross sales of 9570 euros per square meter in 2020 – at Aldi Süd it was only 8964 euros per square meter.
This is also bitter because Aldi was long considered the most productive German retailer. In 2019, gross sales were still 9130 euros per square meter, at Lidl it was just 7420 euros. The discounter, according to the "Handelsblatt" at the time, could outstrip Aldi.
Edeka24: Buy groceries online and have them delivered

Edeka24 online supermarket

"Aldi has not managed well to grow abroad"
But is it really like that? How could Lidl overtake Aldi in such a way?
Peter Kenning, who works as an economist at Heinrich Heine University in Düsseldorf, thinks one aspect is particularly important. "In my opinion, Aldi has not succeeded well enough in growing abroad and through acquisitions from other retailers," he says in an interview with CHIP. According to the expert, this also has a direct impact on business in Germany. "Larger companies can buy cheaper," he says.
However, Kenning attributes Aldi's "crash" to two other, albeit less important, points. On the one hand, the discounter started relatively late with national image campaigns. "Supermarkets like Rewe and Edeka, but also arch-rival Lidl, have long been broadcasting TV commercials that give them a clear identity," he says. Aldi, on the other hand, only started television advertising in 2016 – as the last major German food retailer.
In addition, Aldi has less experience in online trading than other companies. There is no delivery service that customers can use to order groceries at home. Large supermarket chains such as Rewe or Edeka, on the other hand, have been using such services for years. "Even with limited usage, you can learn a lot about customers' shopping habits," says Kenning.

No food delivery: does Aldi score an own goal?

Discount vouchers paradise

Aldi could benefit from the price increases

The price crisis can be a new opportunity for Aldi.


So there are certainly points that suggest that Aldi has fallen behind. Despite the mixed balance sheet, one cannot really speak of a "crash". After all, the group is still one of the most popular food retailers in Germany.
And at a time when energy, petrol and food costs are rising, the chances of a new Aldi moment of glory are not bad. "Discounters generally benefit when people have little money at their disposal – so probably also in the coming weeks and months," says economist Kenning.
Trade expert Frank Küver from the market research company NielsenIQ also spoke in an interview with the German Press Agency of a possible "growth comeback of the discounters". The high inflation rates have the potential to affect people's shopping behavior. "The discounters could use this to gain market share again. After all, cheap prices are their core competence," he sums up.

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