Tracking Aldi Same Store Performance Perceptions

"The market tracking research we get from Solutions Marketing is clearly the most thorough we have ever had. It is also the most cost effective."
John Holman Marketing Manager (formerly) Big W

The Situation –

In March, 2014, UBS engaged Solutions Marketing to repeat a study we conducted 3 ½ years earlier in August, 2010. The objective was to understand the current state of Aldi in the Australian Grocery market and the ‘same store’ changes from a customer perception viewpoint. The studies were identical with both focusing on the primary catchment area of ALDI’s 237 stores existing in August, 2010 (thereby excluding the 75 stores (approx.) added during the intervening 3 ½ year period.

How Solutions Marketing helped -

We conducted an online quantitative survey of main grocery shoppers who had shopped in Aldi in the last 4 weeks. All respondents were drawn from the postcodes where all 237 Aldi stores existed in August, 2010, incl. NSW/ACT (106 stores), QLD (54 stores) & VIC (77 stores). Quotas were set at n=200 in each of the three states, yielding n=600 completed responses.

Areas covered included the following: (All filtered by demographics, main store and frequency of shopping, expenditure in Aldi and overall rating of ALDI)

Who is the Aldi customer (their profiles)
How often do they shop in Aldi?
How much do they spend?
How good is the category range?
What store attributes are important?
How well does Aldi deliver these store attributes?
How well does Aldi rate overall with their customers
What proportion of Aldi customers felt Aldi was not in close proximity to their main store and if it were more convenient, what proportion would shop a lot more often, a little more often or the same

Strategic recommendations –

Overall we found that Aldi is unlikely to be a major threat to Coles or Woolworth’s dominance, but has the potential to be a major irritant, for the following reasons:

Aldi starts with a high share of customers in their primary catchment areas, but....
has a lower shopping frequency
has a considerably lower spend per visit
has a small store footprint which is incapable of matching the range of the majors

We discovered a number of very positive reasons but also a number of negative reasons underpinning the overall performance of Aldi, leaving in our opinion some considerable room for improvement. What was also interesting was that there was very little difference between the results in 2010 and those in 2014, suggesting that Aldi same store performance has seen little change, with almost all the growth coming from new stores added.

The result –

UBS have reported that they first released the full findings to their investors, with excellent positive feed-back, them progressively and selectively to Aldi management, suppliers and other stakeholders, with all reacting positively.

Again, it is gratifying to know that UBS, one of the world’s most successful investment advisory companies can rely on our research findings to add important market and consumer insights to a number of their investment reports