Aldi's strategy for higher market share

Known for low prices and limited services, Aldi is also making a name for itself in own-label wine, nappies, organic baby food and other categories. Expanding private brands is part of Aldi's strategy for attracting shoppers and increasing its market share in the intensely competitive UK grocery industry.

Online retailing is another winning element in Aldi's marketing plan. In addition to wine sold by the case, Aldi's online store now features 'special buys' on non-food items such as home goods and small vacuum cleaners. For now, groceries are not part of the e-commerce initiative, due to the investment needed to manage the physical distribution and delivery of online orders. The company says its e-commerce site has 1 million weekly shoppers.

Aldi has been investing in logistics and physical distribution to support its ever-growing store network. It recently opened a large distribution centre in Over Holton, where it will manage both logistics and training. Next year, it will open a large distribution centre in Wales.

Are competitors stakeholders? Aldi definitely thinks so. Consider the following statement by Aldi's chief exec for UK and Ireland. He's discussing rival discounter Asda's goal of narrowing the price gap between Asda and other competitors to no more than 5%. The Aldi head points out that competitors will make moves that affect Asda's ability to achieve that goal: 'Whether Asda gets to 5% is not just their decision; it’s ours as well. We will not let any competitor get to 5%. That’s a concrete commitment'. In fact, Aldi has been reducing prices steadily to maintain pressure on its retail rivals.