Bringing fresh produce center stage is a goal of discount retailer Aldi, which is in the midst of its $5 billion US expansion program.
The expansion includes building new stores and remodeling existing ones.
The new focus on produce includes a 40 percent expansion in the amount of product lines carried, with the produce department located at the front of the store. Most supermarket chains are investing more in produce departments, which are considered key components in stores.
In a move a couple of decades ago, there was a trend to make produce front and center and the first department shoppers see when entering a supermarket. With produce as an anchor in stores, many chains then look to improve their other in-store departments.
Aldi’s motion to move produce to the front and center suggests the retailer wants to be known as well-stocked store with everything the shopper needs. Additionally, once the fresh produce department is a strong anchor, stores have a tendency to follow through with other departments.
It appears that Aldi with fresh produce, will follow trends of having clean, conventional and organic products that are conveniently packaged. Aldi will likely add even more organic and clean options, in an effort to attract younger shoppers from 18 to 40 years old, who are after more affordable organic options. Whether Aldi will stock more value-added products remains to be seen.
Aldi already offers attractions for Gen X and Millennial shoppers and many of their center-store products have specialty claims, be it free of artificial colors or antibiotic-free meat.
Greater emphasis on fresh often come from higher income households. Will an expanded produce selection beyond basics higher-income shoppers at Aldi? One study shows that 93 percent of Aldi shoppers said pricing/value drove them to the format and 77 percent purchased fresh produce. One-third of shoppers expect to shift much more of their shopping to Aldi.
On price, Aldi will remain a discount retailer, so if the
If other supermarkets want to compete with Aldi, which will remain a discount retailer, those competitors will have to lower their price or invest in other areas of the store to maintain a ‘premium’ on Aldi as well as other discounters by offering a higher level shopping experience.
Studies have shown that 60 percent to 70 percent of markets experienced price declines of 1 to 3 percent when an ALDI opened. Some retailers will also increase service levels, emphasize quality, organic offerings, local items and more choices in general to increase their own competitive advantage.