Huge omission from new concept Aldi Local store
The German retail behemoth is experimenting with a very different store concept - but Aussie shoppers might notice something missing.
German retail giant Aldi is rolling out a radically different supermarket that could conceivably come to Australia.
But if it does, Australian shoppers could have to get used to higher prices and the lack of a key feature that masses of people flock to Aldi precisely for.
Aldi opened its first “Aldi Local” smaller format store in 2019 in the south London suburb of Balham. It now has a handful of the stores dotted around the British capital.
Just like in Australia, where Aldi is nipping at the heels of Coles and Woolworths, in the UK its aim is to become one of the biggest players, partly by moving outside its traditional store format. By some estimates, within a year Aldi could topple Morrisons to become Britain’s fourth biggest grocer behind Tesco, Sainsbury’s and Asda.
What makes Aldi Local different
While Aldi has experimented with a smaller store concept in Australia, with the opening of Aldi “Corner Store” in the North Sydney last year, Aldi Local is noticeably different.
When the Balham store opened an Aldi spokesman told UK website Retail Gazette that its aim was “to help shoppers distinguish between its smaller city stores in London and the conventional-sized Aldis”.
At about 2000 square metres in size, Aldi Local is about twice the size of a typical convenience store. But it’s still smaller than an average Aldi – which are hardly large – with 300 products having to be ditched because of a lack of shelf space.
When news.com.au recently visited the Balham store, nestled on the high street seconds from the Tube, its shrunk size was apparent. While a normal Aldi might have five or more aisles, Aldi Local had a mere three.
The first aisle, like most Aldi stores was dedicated to fresh fruit, vegetables and meat. At the back was a bakery section, So far, so Aldi.
But elsewhere the choice of products was far more geared to products to consume now or at dinner then to stock up the larder.
At the front of the store was a “food to go” section of sandwiches, wraps and soft drinks. The meat section had the usual array of sausages and steaks, but there were also scores of stir fry kits containing ready prepared marinated chicken strips and chopped veggies that just need to be dumped in the wok. Or ready to bake chicken and mushroom slices.
Despite the store’s lack of space, large chunks of shelving were given over to food designed for entertaining such as ricotta stuffed cherry tomatoes and Mediterranean style falafel bites.
Wine and beer, which it’s far easier to sell in supermarkets in Britain than Australia, took up a large chunk of one aisle.
The big absence from Aldi Local
But there were a few things missing from this Aldi store – cashiers for a start.
The Local store is entirely self-serve checkout.
And staff in general. News.com.au counted just three employees in the store.
But the most obvious absence was the thing Aldi is so popular for: special buys.
There was not an air fryer in sight, nor was there any skiwear, plant pots or a gazebo for the garden. There were no washing machines, wide-screen TVs or his and hers matching tracksuits. A selection of mountain bike was nowhere to be found. To the Aldi aficionado, it just didn’t make any sense at all.
And that’s because there’s just no room for the numerous and often individually enormous Special Buys. At Aldi Local, to squeeze into the small space, they’ve had to lose the wide central aisle that is usually given over to the weekly bargains.
“The store doesn’t sell bulkier items that shoppers would have difficulty transporting without a car,” an Aldi spokesman said.
QUT retail watcher Professor Gary Mortimer told news.com.au that overall it was a good move on Aldi’s part to adapt their offering for different locations.
“Getting smaller gets you into inner city locations, when the rents are higher, but the population is denser.”
Prof Mortimer said an Aldi Local could be a good addition for a developer building a unit block that might want a retail choice for younger tenants with larger incomes but not much space.
The concept could work in Australia he said, but customers would have to be prepared for the lack of Special Buys in these stores.
“I suspect a learning process will ensue. Consumers will soon understand the difference between Aldi, with Special Buys), and their convenience business. A bit like Coles and Coles Express.”
Aldi experimenting with similar stores in Australia
Aldi Local coming to Australia is very possible. The firm is already experimenting in Australia with breaking out of its one size fits all store model.
Last year it debuted its Corner Store concept, again in a space smaller than the average Aldi.
There is some overlap between Aldi Local and Aldi Corner Store. They both lean towards grab and go food.
But Corner Store is noticeably more fancy than Local. The entrance to the North Sydney store is dominated by a Sonoma coffee shop with a selection of danishes.
You could squeeze your own orange juice in store. And the bread selection was definitely upscale. Aldi Corner Store featured 12 different types of sourdough; a nearby Woolworths could manage only nine sourdoughs.
Local also pricier
There was another feature of the Local store in London that may rile some shoppers – the prices.
Industry journal The Grocer found prices in the store were around 3 per cent more expensive than an average Aldi, and some items were quite a bit more than that.
At the time of the survey a whole chicken, for example, was £4.19 ($A7.37) at Local but £3.99 ($7.01) at a full size Aldi close by, a difference of 5 per cent.
Aldi acknowledged a “slight difference in price on certain lines” but insisted the store was still “notably cheaper than nearby supermarkets”.
Prof Mortimer said the innovation at Aldi was significant, but the retailer was showing signs of copying its competitors rather than leading the way.
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Self-serve check-outs, for instance, took the better part of a decade to reach Aldi in Australia after Woolworths first began to roll them out.
“While it makes sense to sit back and cherry pick the initiatives that work, the risk is that as you roll out you version, the market leaders have moved onto something else.”
News.com.au contacted Aldi and asked if they had plans to bring the Local concept to Australia and how the Corner Store rollout was progressing. There has been no reply.
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