Aldi Action Items Essay

1563 words - 7 pages

Aldi War Game Call Summary; Discussion Topics, Take-aways
Please find the below outline summary of our call and my understanding of the War Game engagement. I have included an outline of my questions “Open Questions” I’m working on answering, steps I’m taking and reference materials.
* Could you please elaborate on the deliverable format you’re looking for from me?
* When I do store visits, I know you well enough to know but I don’t want to assume fully. Is there something in particular you’re wanting pictures of? Something different from the urban store vs the rural store?
* Please note my objectives for the store visits, please add direction accordingly.
* Lastly, ...view middle of the document...

Aldi is run by two separate teams. One, Aldi Nord (North) is located in Essen, Germany and the other, Aldi Süd (South) operates from nearby Muehlheim an der Ruhr. Merchandise is similar – all of high quality either branded or private label. In Germany, there are 2,400 Aldi Nord and 1,790 Aldi Süd (South) stores. (Forbes, 2013)
* There are 1,300 stores across 33 US states, with 21 regional headquarters across the country. 408 Trader Joe’s units in the United States
* ALDI Launches Accelerated Growth Strategy to Operate Nearly 2,000 US Stores By 2018, ALDI Furthers Southern California Expansion Plans with Establishment of Division Headquarters, (Aldi Press Release, Dec 20, 2013)
* Most of these stores are small about 4,000 to 5,000 square feet with cut boxes on the shelves and very rudimentary displays (Forbes, 2013)
* Products- with 1,500 SKUs Prices are estimated to be 25% -50% less than comparable products at other supermarkets, approx 90%+ is private label; Cash Only no credit cards, unknown about gift cards or EBT
* Shopping Carts – Requires $0.25 rental which is retuned when brought back to racking unit carts stay only in stores
* Management Structure- Each of the 21 regional headquarters is led by a Division Vice President
* Business Model features cost-reducing strategies, such as elimination of some typical grocery store services, shorter operating hours, retail-ready packaging, and in-house distribution network
* They target less affluent areas but not urban or highly populated areas (WIC/EBT/Food Stamps)
* Since they are private they don’t release investor or industry trade data i.e. same-store sales
* Makes use of different media for advertisements and store promotions, digital circular distribution, social media
* Employees are non-union
* According to Stores magazine, the Aldi group was the eighth-largest retailer in the world in 2009 (the most recent figures available), with an estimated $67.7 billion in revenue. According to estimates by Mr. Johnson, about $6.5 billion of Aldi’s revenue stems from sales in the United States. (NYT.com 2011)
* “It simplifies everything — supply chain, delivery,” Mr. Johnson said. “You stock the stuff that’s the highest velocity and that you make the highest margin on.” (NYT.com 2011)
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Open Questions, Work-in-Progress
How do they……
* Collect information on customer’s socio demographics? In the context of product offerings, grade/quality (economy or high-end) price points, customer feedback information on product selection
* Is there any vendor (IRI, NPD, Nielsen, NRF) that has sales data for them?
* If so to what detail and what cost?
* How do they manage themselves against the competition with players like Kroger, and their massive customer knowledge systems?
* Now Kroger is moving into the smaller more limited selection stores targeting Aldi’s shoppers?
* How has the passing of one...

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