How did German discounter Aldi become a British favourite?

10/12/2019

How did Aldi become a British favourite? Documentary reveals how the German ‘retail parasite’ won over traditional shoppers by copying M&S packaging and beating Harrods in a mince pie taste test

Inside: Aldi at Christmas reveals how retailer has become loved across the UK
Experts share how it went from being a small discounter to UK’s 5th biggest shop
Documentary explains how Aldi combines German efficiency with British products to stay low on price while appealing to shoppers

A new documentary has revealed how German discounter Aldi has conquered the British market – as 13 million British households are set to shop there this Christmas.

Inside: Aldi at Christmas, which airs tomorrow on Channel 5, reveals how the retailer has become a British favourite by championing British meat, copying luxury brands packaging, sweeping up awards for its own-brand produce and keeping prices low.

Once known as the ‘retail parasite’, the shop’s first win was beating Harrods in a taste test – and is now Britain’s fifth largest supermarket – overtaking the Co-Op and Waitrose to take an eight per cent share of the market.

In the show, experts also reveal how shoppers were initially put off by the store, when the first British branch opened in Stechford, Birmingham in 1990.

The documentary explains how the first shop was small and sparsely decorated, a world away from what British people were used to in traditional retailers.

Ronny Gottschlich, former Head of Aldi’s closest rival Lidl UK, explained: ‘The Germans really just go shop, and the back out of the supermarket, it needs to be cheap and fast, that’s it’.

Lynn Toogood, one of Aldi’s first British shoppers added: ‘Everything was in boxes, there was nothing displayed on shelves. It was a free for all, very messy!’

Aldi first opened in 1913 in Essen western Germany, and was called Albrecht – Diskont – the founder’s surname and the German word for discount.

Inside: Aldi at Christmas, which airs tomorrow on Channel 5, reveals how retailer has become loved across the UK, by championing British meat, copying brand names, sweeping up awards for its own-brand produce and keeping prices very low

But, it began to thrive after World War II, when many German people had little money and wanted to purchase cheap goods.

It expanded through mainland Europe before hitting British stores in 1990, but took a long time to cement itself as a regular place to shop for the UK public.

‘Everybody saw us as a super threat to their level of profitability’ Paul Foley, former Managing Director of Aldi said.

A selection of Aldi’s Christmas food which is tried by shoppers used to spending their money at upmarket retailers in the show

One former store manager added: ‘The term I’d heard by others was ‘retail parasite’ while others called it ‘a plague of locus landing of Britain’s shores’.

In its first few years, during the festive period, the store lacked the traditional British Christmas staples, but instead favoured German dishes such as stollen, Lebkuchen, Glühwein, which wasn’t popular with British shoppers.

One former store worker explained: ‘I did get some queries as to where were our British Christmas cakes, and we just didn’t have them.

‘Some of the products we’d never seen or tried before, people weren’t prepared to have them on their special day with their family’.

It took Aldi 15 years to cotton on that British shoppers want a touch of class at Christmas, and it wasn’t until 2005 that they introduced their luxury line.

When Aldi started selling their Specially Selected line in 2005, they took inspiration from M&S, using their well-known packaging to showcase that it was luxury goods.

Adam Leyland, editor of trade magazine The Grocer said: ‘M&S is great at capturing that level of indulgence, and part of that was the black and gold style packaging’.

‘So Aldi started to make more premium products for Christmas, luxury, but at an every day price’ Adam added.

But it wasn’t until 2008 when Aldi’s Christmas range really took off. ‘The first real toe in the water was the mince pie’ Adam continued.

‘They claim they’re as good quality as premium retailers, but they cost £1.69 for six, which is still a lower price product.

When Aldi started selling their Specially Selected line in 2005, they took inspiration from M&S, using their well-known packaging to showcase that it was luxury goods. Pictured, some of their luxury line this year

That year, their mince pies, won the Which? best mince pie awards in a blind taste test, beating off high street and upmarket rivals, including Harrods.

Ashley Armstrong, retail editor of The Times said: ‘It made headlines because nobody expected it. Harrords, the creme de la creme of retail, how can their mince pies be beaten by a German discounter?’

‘It was a level of advertising we could have never paid for’ Paul added.

Now, the shop has become a go-to place for many shoppers at Christmas. Last year, the store turned over £1 billion over the festive period.

Angela Clutton, food writer and cook added: ‘The Aldi Christmas table is spectacular, it’s an extravaganza of Christmas fabulous.

‘They’ve got lovely classic things, the Aldi Christmas turkey, the Christmas pudding has extra ‘juzz’ about it. And cheese they’ve been winning awards for over the last few years, some golds, silver, bronzes.

In 2016, Aldi starting selling Christmas hampers, which include a mix of British a German festive favourites

She added the shop continues to bring in shoppers through their quirky products, including a two metre long pig in blanket.

By mixing German efficiency with British traditions, Aldi also manages to offer goods at a much lower price than it’s competitors, while appealing to the public in the UK.

The show explains how they manage to reduce prices by up to 40 per cent, using own brand copycat products.

Adam added: ‘Part of the Aldi model is to take very well-known brands and match them on quality and offer them at significantly lower prices.

‘So you piggy back off those profits and give as many design cues to say they’re basically the same, but much better value.’

They also have significantly fewer products, only 2,000 different items per store, while traditional supermarket has about 40,000 products.

By stocking less they can operate in smaller buildings with less overhead, meaning the store can give discounts.

The store is also designed to keep people moving, and all Aldi products have multiple barcodes so staff can scan quickly.

By mixing German efficiency with British traditions, Aldi also manages to offer goods at a much lower price than it’s competitors, while appealing to the public in the UK

But it’s the discount retailer has appealed to British shoppers too, by launching Christmas adverts and products for the UK.

In 2015, when John Lewis launched its Man on The Moon Christmas advert, the discount retailer filmed their own version mocking the advert, showing how Aldi products were cheaper.

‘Whilst John Lewis was attempting to make people shed tears, Aldi was attempting to make people laugh’ Adam added. ‘Aldi now looked like a cheeky upstart, it’s a very British position to take and it’s mocking the aspirations of John Lewis. Aldi rode off the back of the fame by John Lewis’.

The store has also ensured many of its products are sourced in the UK, with 75 per cent of its meat coming from British suppliers.

And the success of Aldi as Christmas retailer has spread into the rest of the British festive period, with German markets becoming a popular attraction on many high streets.

Consumer journalist Harry Wallop, explained: ‘One of the most fascinating trends of the last 15 years has been the emergence of the German Christmas markets in Britain.

‘Aldi has fed into the Christmas market, the Christmas market has fed into Aldi- there’s a generation of shoppers who’ve actually learned and fallen in love with German products at Christmas.

‘If you go into one of the big four supermarkets like Tesco, they have quite a big selection of Gluwhein and stollen in a way that they never use to 10 years ago.’

Inside: Aldi at Christmas airs on Channel 5 tomorrow at 9pm

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