Brows will have furrowed at Morrisons this morning. Pens will have sharpened at its house broker Shore Capital. The worst has happened. Aldi has made more progress.
Given Shore’s previous pejorative comments about Aldi (and Lidl) at Christmas, it must be wondering what else it can do to stymie progress at this ever-painful thorn in its side.
Aldi – the supermarket with stores that (apparently) look like they’ve been robbed by gangs of schoolkids, has the busiest car parks in the world and has lost the plot by offering customers more than three types of rice. Anyway, it broke into the top five this morning, sneaking ahead of the Co-op and ending up behind Morrisons.
If you listened to the negative press swirling around over Christmas, you’d wonder how it happened.
The reality is that Aldi stores are no more a right old state than any other supermarkets – to suggest otherwise is laughable to anyone that shops across the board. Like everyone else it has a good, better, best thing going on.
And the suggestion it shouldn’t evolve and adapt its ranging to the needs and wants of UK shoppers is moronic – not least because it’s been doing it for years. Today’s news validates the strategy yet again.
Besides, in terms of SKUs Aldi remains lean, even compared with Lidl. More to the point, Aldi hasn’t overtaken first Waitrose, then the Co-op, by making rash decisions at speed and stretching the model to breaking point. It did it extremely slowly.
In April 2015, Aldi edged past Waitrose in terms of market share. “We are proud to now be the sixth-largest grocery retailer and we’d like to be the fifth,” Barnes told The Grocer in May 2015. “And it’s well within our sights.”
Industry snipers
Twenty-one months later, it has happened. Aldi is playing a long game. It won’t be put off its stride by a bit of heckling from industry snipers. It’s a waste of time anyway.
Analyst spin and media chatter might rattle the boardroom, but it makes zero difference to shoppers who couldn’t care less what it says in the business pages of the papers when it comes to deciding where to buy a chicken. They vote with their eyes and stomachs.
Certainly there was a complete lack of pot shots from Aldi this morning, which, despite the news, made no mention of the Co-op and released a typical statement that reinforced its favourite subjects – it offers value and it’s still growing.
“Aldi customers get products of comparable quality to the leading brands at prices that are significantly cheaper than any of our competitors,” said CEO Matthew Barnes. “This unique offering is resonating with British shoppers and we are opening 70 new stores this year to help keep up with customer demand.”
The reaction was possibly a little more animated at its Atherstone HQ.
Cheer up Morrisons
Anyway, cheer up Morrisons. Aldi is way off breathing down your neck. And there was good news in the same Kantar figures after a sad few days for the supermarket following the death of inspirational former CEO and life chairman Sir Ken.
“Morrisons was the fastest-growing retailer within the big four, increasing its market share for the first time since June 2015 with a sales uplift of 1.9% year on year,” said Kantar.
“Although growth came from across the store, premium own label was a real bright spot – sales were up by 35%, while its revamped The Best range made its way into 14% of Morrisons baskets.”
Like a lot of what Morrisons is doing at the moment, The Best range looks extremely good. And the Co-op shouldn’t be overly concerned, either.
“Despite being overtaken by Aldi, Co-op’s 2% sales increase was well ahead of the market, continuing a run of growth stretching back to July 2015,” added Kantar. “A significant own label sales increase of 7% was behind the strong performance, with healthier ranges successfully catering to consumers’ good intentions for the new year.”
In fact, there was (almost) good news all round, with eight of the nine major retailers enjoying sales growth during the past 12 weeks.
Happy days. But no one’s grin will be broader than Aldi’s.
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