Aldi-Just How Do They Do It?

[SpacegirlRevisited]

Did my first ever Aldi shop last night. I knew I would save but I didn't appreciate just how much

What we have eaten so far has been great and the kitchen roll is actually better than my normal brand.

So how do they do it? I can see that they don't waste money on buildings and bags etc but can find very little out about the actual products.

My mother is suspicious of Aldi food and refuses to eat it because she has some ridiculous notion that its made with frogs and snails and puppy dog tails so help me put her right.

[CoconutCake]

I know they buy their fruit and veg from the same places fruit and veg shops but there's so that's why those prices are cheap. Have not got a clue about the rest!

[EnglishGirlApproximately]

They bulk buy in huge quantities, don't spend money on fixtures and fittings, keep staff levels at a minimum and don't bother with any 'extra' services that pushes up the costs at other supermarkets - customer service desk, trolley collection, runners etc.

[CoolaSchmoola]

Their profit margin just isn't as big as the other retailers. Eg where Tesco et al stick a 200% mark up on something, Aldi only put 50% on, the idea being they'll sell more of it and make profit that way.

The overheads are lower, the mark up smaller.

It's a German company, German groceries are significantly cheaper than the UK, they've just continued their business model.

The reason the big supermarkets report such massive profits is because they put huge margins on products. Likewise the reason they can do such things as buy one get one free is because the price for one is more than they pay for two. They still make money on offers.

It's not about Aldi being cheap, they still make a profit they just don't mark up hugely, it's really that the others are a rip off making massive profits from customers.

[SuperiorCat]

Very low overheads, there only seem to be about 6 staff in store at any one time. Their shove it through quick approach at the checkouts means that they don't need loads of till staff, they don't carefully face up on shelves, they leave stuff in boxes / on pallets.

[SpacegirlRevisited]

CoolaSchmoola makes a point that I hadn't really thought about before in terms of the mark up difference.

So far we all agree that the food itself isn't of a much lower quality then.

SuperiorCat the "shove it through quickly" approach was a bit of a shock to the system! I'm going to get me a system going for next week

[flyingwidow]

I believe that they also buy larger quantities from suppliers. They don't have 50 choices for each product so they buy more of individual things instead- meaning they get a greater discount from the supplier- which they can pass onto customers

[CoolaSchmoola]

I put the heavy stuff on first, lightest last, shove it all back in the trolley, then pack at the shelf, light stuff into bags, heavy stuff into a heavy duty Tesco (ha ha!) bag for life or an Ikea one. When I lived in Germany I'd take one of those collapsible plastic crates shopping (they don't provide free bags at all anywhere) not sure why I don't do it now, much easier to carry in and out the car, never tip over in the boot and they hold loads.

[sashh]

They don't take credit cards (mostly) so they actually get paid the day of the transaction, no payment to CC company and they can pay their suppliers on time / early that means they can negotiate a discount.

They have also moved into Britain at the same time as many eastern Europeans and sell a lot of the foods that they want. Eg you will find 50 kinds of ham/salami/sausage but very little other deli stuff.

With the veg they just have one or two of each thing. Eg spring onions, they will have one type, tesco will have some in a bundle, some trimmed neatly into a packet, some organic, some with a fancy name. You probably don't notice, because like me, if you are looking for spring onions you just want the cheapest.

They don't build in prime locations, this has the advantage of being cheaper land and where I am (Wolverhampton) both Lidl and Aldi have shops on main bus routes or near to areas where not everyone has a car.

They have different offers each week/month to keep people coming back.

They don't play music (something I love) o they don't pay for that.

SpacegirlRevisited

My local Lidl is currently selling frozen snails with garlic butter so your mum could be right.

[Tiredemma]

I just LOVE Aldi.

The lead up to Christmas is amazing- some real bargains (cheese/wine etc)

The Gin is fab, as is the Port.

[iseenodust]

I may be eating one of their Rich Marzipan choc bars as I type .

[Chopsypie]

Another forum I go on had one of their members who did product sourcing for aldi (amongst others) and said their stuff was essentially the same. He said they also buy from a lot of Eastern European suppliers where tesco et al don't really have a good supplier base.

Have you ever read about the owner? I think he's dead now, but was once kidnapped and held to ransom. He was such a tight arse he negotiate his ransom down to half, then put it down as a business expense. Apparently the kidnappers thought they had the wrong person at first as his suit was so cheap. Can't link as I'm on my phone but it's very funny!

[CoolaSchmoola]

I saw an Alan truck, emblazoned with the Anchor butter brand, delivering at our Aldi today... So at least one of their dairy items is made by a 'brand' manufacturer....

Side note - the Specially Selected Sri Lankan Chicken Soup is utterly divine. I loved it so much I was bereft when they didn't have any today and will be going to our other branch tomorrow to hunt for some.

[CoolaSchmoola]

And Arla truck, as in the international dairy products manufacturer, not Alan, I have no idea what the truck's name is.

[Allice]

Agree about the Sri Lankan chicken soup, in fact all the new fresh soups are excellent and such good value.

[DampDudes]

jealous. I want an Aldi. All we have is a bloody Waitrose. I'm just taking them for all the free coffee I can get atm.

[KhoPeePee]

Chopsy that story about the owner is ace, I'm going to google it now. Also, agree it's just the operating model that costs them less, the products must be just as good as anywhere else. They may allow artificial preservatives though which I don't think the big supermarkets allow in their own brands.

[pearlgirl]

I was talking with a friend in the summer and he said it is because their mark up is less than the other supermarkets - I go for all my tinned stuff, juices, frozen veg .