retail news in context, analysis with attitude

I commented yesterday about the degree to which discounters Aldi and Lidl have disrupted the UK supermarket business and tried to draw a lesson for US retailers:

I saw a comment the other day from a regional supermarket CEO in which he said that he thought that Aldi would have only a "minimal impact" on his company. Forgive me, but I think this is incredibly shortsighted ... I think that pretty much every food retailer has to work on the assumption that competitors from every angle - Aldi, Lidl, Amazon, etc... - are positioned to have maximum impact on their companies, and then to arm themselves for the battles that will ensue.

MNB user Craig Ryder responded:

With reference to your regional supermarket CEO comment: I was with one of the UK Big Four when Aldi, Lidl and Netto first threatened UK retail in the mid 90s. We experimented with formats to combat them….and then concluded that they would barely threaten the market, perhaps commanding a combined 5% in the long term. In fact, we sold excess car park space to Aldi in a couple of instances – so sure were we that they appealed to a small and discrete audience. For ten years this all played out as expected …. then you know the rest!

As an aside, it’s not often reported this way, but the catalyst to their impressive growth was a rapid and unpublicised improvement in private label quality – the imminent economic downturn then created the perfect storm.

And MNB user Paul Gillis chimed in:

Death by a thousand paper cuts is still death.  Just a little slower.

But no less painful, methinks.
KC's View: