retail news in context, analysis with attitude

The Los Angeles Daily News has a piece noting that the high level of supermarket competition in the Southern California market means that any newcomer has "to be firing on all cylinders. They have to have their marketing strategy in place, their pricing has to be good and they need to offer products people will want to buy. In short, they have to get it right."

And if they get it wrong ... well just as Fresh & Easy and Haggen, each of which came to ignominious ends.

Aldi's entrance into the market, the story suggests, seems likely to go differently. The German discounter has 18 open in Southern California now, with plans to have a total of 45 open by the end of the year.

"There are several factors that set Aldi apart from Haggen and Fresh & Easy," the story says. "First off, they already had nearly 1,500 stores in the U.S. before they came to Southern California, so they likely know a thing or two about economies of scale. Secondly, their prices really are low." Plus, "nearly all of their products are private-label brands of their own and the quality seems to be good."
KC's View:
It took longer for Fresh & Easy to crash and burn than Haggen, but in both cases, death seemed both inevitable and self-inflicted. It seems unlikely that Aldi will suffer from serious self-inflicted wounds, and so it will be up to all the companies that compete with it to offer compelling, differentiated experiences that provide the products and prices that will keep customers from going to Aldi.

And the companies that think that Aldi won't have much of an impact, that they can just keep on doing business the way they've always done business ... well, I think they're making a serious mistake. If they get hit hard, they'll have nobody to blame but themselves ... and the wounds, once again, will be self-inflicted.