Aldi has launched a new banner; Aldi 'Local' in Balham London. We look at how the 'Local' banner differs from its standard stores and how discounters are evolving their store formats.
Offering a more convenient option in the city environment
The store is around 600 sq m, half the size of a typical Aldi and has a reduced range. There are around 1,500 SKUs, compared to the 1,800 in a standard store. In order to tailor the 'Local' branch to its city location, Special Buys and larger pack sizes have been removed from the range. Aldi told The Grocer this is to make the store easier to shop without a car. Maintaining breadth of range and space for fresh is essential as our ShopperVista data has revealed produce is the most shopped category in Aldi.
The new banner shows Aldi's continued exploration of small store formats. Aldi Archway is currently the retailers smallest store, being slightly smaller than Balham. Archway will potentially now become a 'Local' store. As may Tooting, Kingston and Kilburn, its other city branches. Performance will be assessed before any decisions on whether to covert the stores to the 'Local' banner are made.
Aldi has emphasised this is not a move to expand into convenience. However, expansion in city centres, and particularly London is often challenging for discounters with a lack of the larger sites with car parks they typically target. Continued innovation in small formats gives the retailer more opportunity to grow its presence in these areas and target new shoppers on different missions.
There is a sizeable opportunity for growth in London however the competition for the best sites is intense. Our ShopperVista data shows 53% of London shoppers would use an Aldi or Lidl more if there was a store closer to them. Subscribers can read more about this in our UK discounters: factors influencing growth report.
Discounter format evolution
We are increasingly seeing discounters trialling new store designs across Europe. Aldi, Lidl, Norma and Eurospin have all looked to evolve with different concepts to target new shoppers and expand their reach;
- Lidl opened its smallest store in Germany in February. At 503 sq m it is less than half of the traditional size of a Lidl store and offers 80% of the standard range. This is part of the retailers strategy to secure space near city centres. Plans are to open four more of these in 2019 in Munich
- German discounter Norma is building larger stores and increasing its range. It will be adding around 160 SKUs to its existing range, mainly in chilled and fresh. The retailer is looking to emulate Aldi and Lidl's newest store formats
- Italian Eurospin is also trialling a larger format. There will be greater space dedicated to fresh, including a butchery and bakery
For subscribers looking for more insight, look at our latest Aldi store visit presentation.
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