retail news in context, analysis with attitude

Regarding complaints from IGA Inc. that it is faced with tough competition from discounters Aldi and Lidl, one MNB reader wrote:

Having seen and worked with IGA in the past, I would agree with you that they aren’t very good at playing offense. With the exception of some of their standout stores, they’re still playing based on the ‘old’ grocery model. Aldi has been in the US for more than 40 years… it’s hardly a surprise, and IGA has had plenty of time to watch and learn. In my area, Aldi stores are hiring, and their starting wage is about 30% more than other retail stores in the area. It’s not going to get any easier!

From another reader:

Aldi has been in USA over 40 years and Lidl is now in year 3.

Aldi ( and Sav a Lot)  have scratched out a hard discount market share of 2 percent, but a long way from the disruption effect seen in Europe and Australia. The channel is growing 5 % , but it is not through broader consumer acceptance, simply more stores, i.e.  Aldi opening 100 stores a year is 5 percent increase ( Dollar General 975 new stores-2019).

The IGA comparison is valid, because where Aldi appears to do well is rural Midwest areas that are “food deserts” lacking all the “full service, price competitive” channel options found in every USA suburb.

Hard discounters should not be ignored, but e-commerce and dollar channels have received far broader acceptance by the USA consumer.

MNB reader Matt Nitzberg wrote:

Regarding the story on Aldi, Lidl, and IGA‘s reaction, businesses that thrive over time will put more emphasis on chasing the customer than the competition. That’s because playing offense with customers creates the most effective defense against competitors. While IGA has some gaps to close, they’re not alone. Retailers that aren’t relentlessly focused on creating better experiences for customers are going to fade and fold.

And from MNB reader Alan Finta:

Aldi is in a great position to take advantage of the growing Boomer demographic in the U.S.  I understand the comment from the Wal-Mart executive about “counting on its wider range of products and equally low prices to keep customers loyal.”  That may be important to larger families with varying tastes, but for my 80-something parents, they’ve “been there, done that.”  The close parking, smaller store format, and reduced variety is right up their alley.  They don’t want to, or simply can’t, walk a mile and a half to do their small bit of grocery shopping.  They also aren’t about to figure out on-line ordering and home delivery at this point in life.  Each time I visit the Aldi in So Cal where they live, it is apparent the folks in their +55 Senior Community are adapting to this new format.


On another subject, from MNB reader Glenn Cantor:

I work with another grocery industry business, other than Walmart, that also has a vibrant OTIF program.  Much of our business with this company is shipped by LTL carriers. Obtaining on-time deliveries is complicated by the need for multiple, small shipments as well as the availability and cost of carriers.  It is good to see that transparency is part of Walmart’s program, because correcting the causes of non-compliant shipments requires more than pushing the solutions, and fines, on suppliers.  Fines, alone, won’t correct the problem.  Instead, they will  ultimately increase costs to the consumer as manufacturers being to incorporate these new costs into their cost structures.

Regarding the troubles being experienced by Marks & Spencer, MNB reader Beatrice Orlandini wrote:

I always have been a great M&S fan.

No food retailer was ever at their level in product packaging and quality and their clothes were great quality and I could always find something that I knew would last.

More than a decade has gone by for some items and I still have them and can still wear them (it proves they stood the test of time, fashion and... weight!)

I was in London a few months ago and more than happy to visit a nearby M&S. Besides a nightgown, there was no other item that I could lure myself to buy.

Sad is the only definition I can give to their assortment.

Doubly sad because though those items may not be attractive their quality could be excellent and they could linger forever on those racks…

And finally, referring to something that I called the solution to bricks-and-mortar blues in last week's FaceTime, MNB reader David Spawn wrote:

Let’s be careful about offering everyone booze at stores…  sure it can differentiate bricks & mortar…but so can a lawsuit from a DUI…

I was joking. Mostly.
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