retail news in context, analysis with attitude

The Financial Times has a story about how it is at least possible that the UK has reached "peak Aldi."

Here's the rationale:

"The German discount grocer and its rival, Lidl, which only sell through stores, have missed out during the pandemic as more sales moved online. They are now hoping to claw back business as the economic downturn is expected to prompt shoppers to seek out lower prices. But industry experts said their recent rapid growth and competition from traditional supermarkets would make it harder for the discounters to take more business from rivals in this recession than in the last."

FT notes that "Aldi has instigated a partnership with Deliveroo and launched a click-and-collect service. But these are small-scale trial initiatives. The company said it was 'listening closely to customer feedback' on both but that whatever it did online 'needs to fit with our low-cost operating model'. Lidl has come to broadly similar conclusions. Both companies are still aiming to grow by opening stores and winning over more shoppers as wages are squeezed and unemployment rises."

KC's View:

This is a question that a lot of retailers are wrestling with right now - to what extent has the acceleration of e-grocery that occurred during the pandemic created an entrenched consumer trend?

Though, now that I write it, I actually think that it probably makes sense to avoid the word "entrenched" as much as possible.  If we've learned nothing else from the past six months, it should be that almost nothing is entrenched.

Count me among the people who think that retailers need to not be one-trick ponies.  That they need to have a variety of weapons in their competitive arsenals that allow them to make fast pivots when the moment calls for it, and yet have a clear sense of self-definition and identity so that ever move reflects the integrity and value proposition of the brand.

Trader Joe's is an example of this.  The folks there clearly have made the determination that e-commerce, click-and-collect and delivery have no place in the brand's ecosystem.  I have no problem with that - though it will limit my shopping at Trader Joe's for the foreseeable future, and, I suspect, other people's.  There is such a thing as the intelligent loss of business, and that's the best Trader Joe's is making, even if it limits growth.  (Short-term growth?  Long-term growth?  We'll see.)

As for Aldi … this seems to be what it is trying to do, though the FT story seems to be suggesting that however many toes it dips into the e-commerce waters, it plans to stay resolutely on the path of discount stores that appeal to value-minded customers.