Aldi has transformed itself in the UK from a down-at-heel discounter to a credible, stylish weekly shopping destination over the past few years. And now it has raised its game again with the opening of its first city centre store in Manchester's Arndale Centre.
Since it opened last December, the store has become the most profitable to date in the UK and Ireland, helping boost company wide sales by 17% year-on-year during the first half of 2007.
The success of the store has now sparked plans for a clutch of other city centre outlets, with Edinburgh earmarked as the next, due to open next year. It will be the blueprint for more stores of similar size. In fact, Aldi will have opened 50 new stores by the end of this year and plans to open a further 50 in 2008.
What makes the Arndale store so remarkable is the fact that it breaks the mould for Aldi. The German discounter typically favours purpose-built stores of about 700 sq m with some 90 car parking spaces, so the split-level 1,450 sq m Arndale Centre store is a total departure for the retailer, giving it vital experience in adjusting its formula to sites not built to its specifications.
"Format and formula is an important part of being a discounter, but we have had to compromise to get a store here," admits regional MD Matthew Barnes.
Aldi had to incorporate two store entrances - one in the shopping centre and one off the main high street, which is a first for the retailer.
This also meant tills had to be put in at both ends of the store and chillers located to the side rather than the rear.
There is also no exclusive Aldi car park and, because the store is split over two levels, shoppers have to use baskets or smaller trolleys. And, unlike Aldi's other 350 UK and Ireland stores, the Manchester store is laid out across five aisles instead of the standard four.
Aldi is the Arndale Centre's sole supermarket, which is why the retailer has been so accommodating about changes to the layout. "The management was delighted when we came in because it complements their offer," says Barnes. "And it's been phenomenally successful for us. The Arndale is one of the busiest shopping centres in the UK and we have far more shoppers coming through here per day than our standard stores."
The retailer's move into a busy shopping centre highlights the gradual shift in its customer base. Prior to 2000, customers were from a C and D demographic but Aldi is now appealing across all social strata and to impulse and lunchtime snack shoppers. "We have a range of customers, from students through to professionals, who pop in on the way home to buy a bottle of wine," says Barnes. "To capture this market we have an alcohol chiller, which other stores don't."
A greater emphasis has been placed on lunchtime trade with 50 lines in its chilled snacks range. "We've learnt we can sell a huge number of sandwiches and are looking at introducing a bigger range in other locations, although most of our stores are in out-of-town locations," says Barnes.
The Manchester store has also embraced new technology that is ahead of even its larger competitors. It uses plasma screens in the shop window to communicate special offers, partly because it is not allowed to display posters and partly to underline the shop's more modern image.
The store has 30 to 35 members of staff whereas a normal outlet would have just 10, according to Barnes, who believes this larger store is conducive to a better shopping experience. Like other Aldis, the Manchester operation stocks a compact range of almost exclusively own label products. It also sells 50 one-off special products a week, including food items as well as non-food such as
bedlinen and laptops.
These products, positioned in the centre of the store, are a great way to increase footfall, he adds. "Customers will plan their shop for Thursday or Sunday to coincide with the offers and on these mornings we always have queues outside. The specials ensure our range is constantly changing and we can be timely." He gives as an example the Rugby World Cup shirts Aldi was selling last week.
Barnes says the special offers also enable the retailer to test the water for additions to the core range, which, at only 850 lines, has to be dynamic.
It is not just additions to its product range that the company is looking at, it is also on the hunt for many more stores. "We want 1,500 stores in the UK, although finding sites is not easy," says Barnes.
"But with Manchester we are learning to be more flexible. In fact, we are now building some stores with flats above and a car park below. I think this proves we can adapt to achieve our goals." n
Since it opened last December, the store has become the most profitable to date in the UK and Ireland, helping boost company wide sales by 17% year-on-year during the first half of 2007.
The success of the store has now sparked plans for a clutch of other city centre outlets, with Edinburgh earmarked as the next, due to open next year. It will be the blueprint for more stores of similar size. In fact, Aldi will have opened 50 new stores by the end of this year and plans to open a further 50 in 2008.
What makes the Arndale store so remarkable is the fact that it breaks the mould for Aldi. The German discounter typically favours purpose-built stores of about 700 sq m with some 90 car parking spaces, so the split-level 1,450 sq m Arndale Centre store is a total departure for the retailer, giving it vital experience in adjusting its formula to sites not built to its specifications.
"Format and formula is an important part of being a discounter, but we have had to compromise to get a store here," admits regional MD Matthew Barnes.
Aldi had to incorporate two store entrances - one in the shopping centre and one off the main high street, which is a first for the retailer.
This also meant tills had to be put in at both ends of the store and chillers located to the side rather than the rear.
There is also no exclusive Aldi car park and, because the store is split over two levels, shoppers have to use baskets or smaller trolleys. And, unlike Aldi's other 350 UK and Ireland stores, the Manchester store is laid out across five aisles instead of the standard four.
Aldi is the Arndale Centre's sole supermarket, which is why the retailer has been so accommodating about changes to the layout. "The management was delighted when we came in because it complements their offer," says Barnes. "And it's been phenomenally successful for us. The Arndale is one of the busiest shopping centres in the UK and we have far more shoppers coming through here per day than our standard stores."
The retailer's move into a busy shopping centre highlights the gradual shift in its customer base. Prior to 2000, customers were from a C and D demographic but Aldi is now appealing across all social strata and to impulse and lunchtime snack shoppers. "We have a range of customers, from students through to professionals, who pop in on the way home to buy a bottle of wine," says Barnes. "To capture this market we have an alcohol chiller, which other stores don't."
A greater emphasis has been placed on lunchtime trade with 50 lines in its chilled snacks range. "We've learnt we can sell a huge number of sandwiches and are looking at introducing a bigger range in other locations, although most of our stores are in out-of-town locations," says Barnes.
The Manchester store has also embraced new technology that is ahead of even its larger competitors. It uses plasma screens in the shop window to communicate special offers, partly because it is not allowed to display posters and partly to underline the shop's more modern image.
The store has 30 to 35 members of staff whereas a normal outlet would have just 10, according to Barnes, who believes this larger store is conducive to a better shopping experience. Like other Aldis, the Manchester operation stocks a compact range of almost exclusively own label products. It also sells 50 one-off special products a week, including food items as well as non-food such as
bedlinen and laptops.
These products, positioned in the centre of the store, are a great way to increase footfall, he adds. "Customers will plan their shop for Thursday or Sunday to coincide with the offers and on these mornings we always have queues outside. The specials ensure our range is constantly changing and we can be timely." He gives as an example the Rugby World Cup shirts Aldi was selling last week.
Barnes says the special offers also enable the retailer to test the water for additions to the core range, which, at only 850 lines, has to be dynamic.
It is not just additions to its product range that the company is looking at, it is also on the hunt for many more stores. "We want 1,500 stores in the UK, although finding sites is not easy," says Barnes.
"But with Manchester we are learning to be more flexible. In fact, we are now building some stores with flats above and a car park below. I think this proves we can adapt to achieve our goals." n
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