1.
Matthew Barnes
CEO, Aldi UK
Last ranked: 12
Barnes is hot property. And is it any wonder? Sure, Aldi has just a 4.8% share, which makes it a relative minnow compared with Tesco’s 29.1%. But when Dave Lewis tries to nod off at night, Aldi will loom large in his nightmares. He’s not alone. For Aldi’s transformation under Barnes (and Germany-bound joint MD Roman Heini) has wreaked havoc.
The very reason a price war is raging at all is because Aldi (and Lidl) have brought price points way down and dragged the major multiples with them. And it’s costing them dear.
Asda has pledged to invest £1bn into lowering, or freezing, price points to compete with Aldi (although its boasts about how it’s getting closer simply serve as a reminder of how much of an irritation Aldi has become to them.)
Morrisons did the same, pouring a billion into prices, and making price-matching Aldi (and Lidl) a key selling point of its Match & More loyalty scheme, but it didn’t work. Morrisons endured a miserable Christmas and CEO Dalton Philips was sacked.
Sainsbury’s announced £150m worth of price cuts and entered into a jv with Netto in a vain attempt to do something about Aldi poaching its customers, although £150m is nowhere near enough and the 15 Netto stores are nothing but an interesting, albeit promising, trial.
As for Tesco, when CEO Philip Clarke was sacked last year, the way he buried his head in the sand over the damage being done by the discounters was hailed as a key reason for his demise. And as well as cutting margins to cut prices, new CEO Dave Lewis is now radically scaling down its range by up to 30% - a decision rooted in Aldi’s strategy of simple, uncomplicated ranging.
In short, a great deal of what the big four are up to right now has been influenced by Aldi. And while the big four work themselves up into a lather, Barnes and Heini cheerily insist two things: that they will never be beaten on price, and that any price war will only play into their hands.
So far, they are being proved right. Although the price gap is shrinking, a price gap remains. And although Aldi’s sales have begun to slow down in recent months, it has very little to do with the price war. Barnes and Heini have insisted for at least two years that its dizzying sales hikes were never likely to be sustainable. Besides, those sales are still numbers that Aldi’s rivals can only dream of - up 22.6% at last count. By contrast, over the same period, the big four were all showing negative growth.
So Aldi may be smaller than its rivals, but it’s by no means any less powerful for it. The big boys have gone toe to toe with Aldi but failed to land a single meaningful blow, while the discounter is punching above its weight and landing jab after jab.
So in 2015 the man who will take sole control at Aldi in April as its UK CEO is number one on our Power List: Aldi lifer Matthew Barnes, good humoured, smart, assured, and with a huge amount of skill and passion for grocery retail. Small wonder Morrisons is courting him.
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