Tomahawk, WI 07/07/2014 (Basicsmedia) – The discount food retailers Aldi group and Lidl Dienstleistung GmbH & Co. KG are looking to use new ways to get back to the number one slot in the discount grocery industry in Germany. The two companies are the discount chains who have always focused on manufacturing and selling of own brand goods at low prices. The motive was to compete with the other big companies including Carrefour and Tesco. But now they are adding up a big name brands in their stock so as to increase the number of customers. The latest addition in Aldi’s product range is the famous coke of The Coca-Cola Company (NYSE:KO).
The discount food retailers are at their saturation point in the domestic market. And, therefore, it has become imperative for the discount retailers Aldi or Lidl to look beyond the domestic market. Also, Aldi went a step ahead and started to add big name brands including Coke, Nivea and Nutella. It added Coca-Cola in its stock in October 2012. It was against the tenets of Aldi’s strategy. The step worked for the company and helped it to increase its falling market share.
Aldi is one of the biggest and oldest store operators in Germany. It became the biggest discount store operator by selling its own brands for more than 40 years. Lidl was more flexible in its product range as compared to Aldi. It is the reason Lidl started capturing higher market share in the industry.
Aldi and Lidl management didn’t make any open comments on the matter. However, the spokeswomen for Aldi’s two main segments mentioned that the focus will stay on in-house products. The retail chain will only add few brand names that share an emotional relationship with consumers.
Aldi Group has always stayed ahead of its peer Lidl that is a part of the Schwarz group. Aldi started long back in 1962 whereas Lidl started in 1973, and from that time there was no looking back for the two companies. Aldi group focused revolved around the efficiency. The operations in all the departments were kept simple, for example, cashiers were required to memorize the prices of the all goods sold so that the process was faster and accurate.
Aldi, owned by the Albrecht brothers had a dispute on stocking cigarettes in the 1960s which split the firm into two parts Aldi Nord and Aldi Sued taking care of North Germany market and South Germany market respectively. Both the units keep the costs down by following the same pricing, supply and marketing strategies.
Aldi and Lidl both are struggling in Germany market. The expectations are that Schwarz group can overtake Aldi by year 2018. Lidl will have a compound annual growth rate of 6.1% as compared to the 4.5% growth rate of Aldi for the period 2013 to 2018.
Aldi and Lidl are having an intense war over the stocking and pricing of Coke. Both are finding different ways to get an edge in the competitive market. Also, both the companies are exploring new international markets to enhance their sales and profitability. Lidl is looking to open its stores in Serbia in 2016 and the US by 2018.
Aldi is moving to big brands, but it has to make sure that in the restructuring process it doesn’t losses control of its own supplies and the advantage of keeping costs down. The margins should not suffer. After all, it is Aldi’s own products that had made it the number one discount operator store by sales of the world.