Retail Leader - May/June 2018 - 9

Aldi's new format showcases fresh and clearly conveys a value proposition that is problematic for many competitors.

man's, HEB and Publix. Aldi has won more than 200 awards from
BrandSpark International for its private brand products ranging
from best new product, parent tested and approved products,
gluten-free product and private brand wines.
Beyond price and product quality, Aldi is looking to leveraging
another key differentiator: size. The company's expansion the U.S.
involves opening larger stores that can accommodate expanded assortments, especially in the areas of fresh and Aldi's premium own
brands. Aldi has increased its average store size by nearly roughly
30%, communicating to developers a desire for 22,000 square feet
locations compared to 17,000 square feet five years ago.
In addition, as consumers have become more concerned
with healthier eating, Aldi has made sure its private label range,
which comprises 90% of the assortment, are on-trend. Aldi
has been stepping up its assortment with new product lines
that have quickly become customer favorites, including a fastgrowing organic selection, USDA Choice meats, the liveGfree
gluten-free product line, the SimplyNature line of products free
from over 125 artificial ingredients and preservatives, and the
Never Any! line of meats free from antibiotics, added hormones
and animal by-products. Aldi also now carries a full line of
baby products, called Little Journey, which offers diapers, wipes,
training pants, formula, organic food and snacks.
Stores also offer an Aldi Finds section: an area with premium
food and household products that are only in stores for a limited time. The Aldi Finds department, while not a unique retail
concept, does bring a distinct treasure hunt appeal to the store
experience and the limited duration of seasonally relevant offers
encourages shopper frequency.

TURNING THE SHIP
The majority of Aldi's existing fleet of more than 1,750 U.S. stores
in 35 states are around 15,000 square feet and were built to stock
1,000 SKUs with a limited fresh offering. The newer stores, such as
the one in Tampa, can be as large as 25,000 square feet and stock

around 1,400 SKUs. The company thinks American consumers
are migrating toward small, nimble stores instead of sprawling
warehouses and supermarkets that take longer to navigate.
"Aldi's format is really about modern convenience," said David
Ciancio, Global Customer Strategist at dunnhumby. "The smaller
curated assortment of around 1,400 SKUs, the simplicity and the
value is really attracting customers."
Aldi leveraging consumer trends is nothing new. The company
doubled its footprint in the U.S. in the 2000s to more than 1,000
stores during and after the Great Recession, at a time when many
U.S. shoppers were buying based on price and were getting really
comfortable with the idea of private label being "just as good as
national brands."
According to the Private Label Manufacturer's Association,
private brands now make up 17% of total grocery sales in the U.S.
Aldi was one of the first grocers to understand that private label
brands can provide premium value. Meanwhile the upside for
private brands in the U.S., according to IRI, continues to be huge.
"There's a lot of headroom in the U.S. for private label to
increase its market share," said Fernando Salido, EVP, Shopper
Analytics Consumer & Shopper Marketing Solutions at IRI.
"And when you think about which groups are most likely to
adopt private brands, it's the millennials and Gen Z who did not
grow up with national brands. And these people make up 47%
of the U.S. population. Multicultural growth is also a key driver
of future consumption trends. Aldi is focusing on these products trying to attract these populations." Aldi is also leveraging
another trend supported by recent shopper behavorial data.
"The smaller format is the future of retail. Shoppers are making
more trips but buying fewer products per trip, smaller baskets with
more visits. The research shows that shoppers are saying that having
45,000 or even 100,000 SKUs, as in a traditional supermarket, is
too confusing, too difficult to shop. And if they need more ketchup,
there's always the endless aisle online," Ciancio said.
Aldi's assortment strategy not only benefits shoppers but also
MAY/JUNE 2018 Retail Leader.com

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Table of Contents for the Digital Edition of Retail Leader - May/June 2018

Contents
Retail Leader - May/June 2018 - Cover1
Retail Leader - May/June 2018 - Cover2
Retail Leader - May/June 2018 - 3
Retail Leader - May/June 2018 - Contents
Retail Leader - May/June 2018 - 5
Retail Leader - May/June 2018 - 6
Retail Leader - May/June 2018 - 7
Retail Leader - May/June 2018 - 8
Retail Leader - May/June 2018 - 9
Retail Leader - May/June 2018 - 10
Retail Leader - May/June 2018 - 11
Retail Leader - May/June 2018 - 12
Retail Leader - May/June 2018 - 13
Retail Leader - May/June 2018 - 14
Retail Leader - May/June 2018 - 15
Retail Leader - May/June 2018 - 16
Retail Leader - May/June 2018 - 17
Retail Leader - May/June 2018 - 18
Retail Leader - May/June 2018 - S1
Retail Leader - May/June 2018 - S2
Retail Leader - May/June 2018 - S3
Retail Leader - May/June 2018 - S4
Retail Leader - May/June 2018 - S5
Retail Leader - May/June 2018 - S6
Retail Leader - May/June 2018 - S7
Retail Leader - May/June 2018 - S8
Retail Leader - May/June 2018 - 19
Retail Leader - May/June 2018 - 20
Retail Leader - May/June 2018 - 21
Retail Leader - May/June 2018 - 22
Retail Leader - May/June 2018 - 23
Retail Leader - May/June 2018 - 24
Retail Leader - May/June 2018 - 25
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Retail Leader - May/June 2018 - 28
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Retail Leader - May/June 2018 - 42
Retail Leader - May/June 2018 - Cover3
Retail Leader - May/June 2018 - Cover4
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