(Author : Julie Cruz)
As Chancellor Angela Merkel urges European leaders to accept austerity, German shoppers have had enough of it from Aldi.
The creator of the no-label hard discounting model, Aldi is finding that low prices alone are no longer enough to win customers in its domestic market, for whom bright, tidy shops and a wide choice of brands are growing in importance.
“German shoppers are just like anyone else, they do want an attractive store, as well as efficiency and low prices,” said Bryan Roberts, an analyst at Kantar Retail in London. If Aldi wants “to do more than just tread water, they’re going to have to put a bit more resource into making the stores more attractive.”
Aldi’s share of the 171 billion-euro ($224 billion) German grocery market has stagnated over the past five years, trailing gains by competitors such as Rewe Group. While its U.K. stores have become a thorn in the side of Tesco Plc (TSCO) and its Trader Joe’s chain is mounting a challenge to Whole Foods Market Inc. (WFM) in the U.S., the discounter is under pressure at home as affluent Germans seek better quality.