Aldi North invests 5 billion Euros
German discount grocery chain Aldi North is planning to spend more than 5 billion Euros ($5.71 billion) to revamp its stores around the world.
Aldi number 2 in Europe
Aldi Süd and Aldi Nord will be the second largest supermarket player in Europe in 2018. In 2016, Aldi was number five only.
For several years, the Aldi brand has taken a position as the fifth largest grocery group in Europe. But with a turnover last year of 58 billion euro: 33.8 billion euro on Aldi Süd and 24.2 billion euro on Aldi Nord, Aldi outgrows its European competitors Tesco and Metro Group, and push French Carrefour to third place in Europe, writes Dansk Handelsblad.
Even though the 58 billion euro is enormous by Scandinavian standards, it is still behind its main competitor, the German Schwarz Group, which is the leading grocery chain in Europe with a turnover of 101 billion euro last year. That is approximately 5 times the total turnover in the Norwegian grocery market!
According to a new forecast from Retailytics (www.retailytics.com), the Schwarz Group, which is the parent company of Lidl and Kaufland, will ensure that position further in the coming years, with an expected growth in revenue of 33% by 2021.
France is difficult for German chains
In a previous forecast, it was expected that Aldi would first overtake Carrefour in 2021, but progress especially in UK means that Aldi, according to the forecast, raises revenue much faster than previously expected.
But after 30-40 years in France, Aldi can still not match French competitors like Carrefour or Auchan. This seems to suggest that French consumers have a large home bias in preferences. This can explain why Aldi still only occupies the 10th place on the list of the largest grocery chains in France, with a minimal market share of 3 per cent in 2016. It is the same low market share and position that Aldi has achieved in Denmark after 40 years!
We can conclude that Aldi is popular in many markets, but not in France and Denmark. Something similar was seen in Norway some years ago. German Lidl had no chance in the Norwegian market. Many believe that Lidl was poorly prepared and did not understand Norwegian consumers well enough. Nor did the German giant understand the consequences of Norway being outside the EU.
With Norway outside the EU, Lidl could not use its huge purchasing power to push prices for sensitive agricultural products like meat and cheese. Hence Lidl withdrew from the Norwegian market in 2008 - after four years with heavy losses. German discounters are good, and they invented the hard discount concept, but they do not win all the time, everywhere.
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