This week Aldi held its first trade briefing in the UK. On the day, Aldi described its future ambitions in the UK, where it has established a significant presence in recent years. This included a continued commitment to the business model which has supported its growth to date:
- Consistency, underpinned by quality, service and availability
- Simplicity, through everyday low price, no gimmicks and leaner head office operations compared with competitors
- Responsibility, supported by adherence to GSCOP, sustainability and ethical trading
These commitments offer Aldi’s suppliers three clear benefits – partnership, certainty and growth.
Growing its network
Aldi also stated its commitment to investing in three key areas to support its growth strategy. Firstly, its stores and distribution network, which will help it to fill geographic gaps in its portfolio and to better service new and existing stores.
People are key
Secondly, it’s investing in people. Aldi is investing in apprenticeships and placement years and has set up the Aldi Academy in Bolton.
Thirdly, Aldi has just started a major project to advance its IT systems. It’s investing to be “ready for the future”, and the initiative will look to address data sharing and forecasting amongst other things. This is likely to be of interest to Aldi’s many suppliers and marks a move towards deeper supplier partnerships and a less transactional approach.
Aldi emphasised the importance of on-shelf availability on the day. Its limited range makes it crucial for stocked products to be on shelf and available for customers.
Aldi has some interesting ways of managing this challenge. It operates a dual/multiple-supply model on many of its products, with products manufactured and supplied by more than one business. Typically, supply is split by region and offers Aldi an “insurance policy” against supply issues, which have a disproportionate impact on Aldi’s stores due to its limited product range.
The use of mixed cases containing complimentary products is another interesting feature of the Aldi supply chain. Aldi uses these to add value and improve product choice for customers. By operating in this way, it manages to keep the number of case variants it stocks to a minimum, helping maintain its efficient supply chain.
These two strategies offer potential Aldi suppliers opportunities to engage with the business. The dual-supply strategy, in particular, means suppliers can manage their obligation, building the necessary capability in a more controlled way.
To find out more about the Aldi operation, take a look at the Aldi supply chain snapshot.