Aldi Local: Supermarket rolls out smaller format store in UK with no special buys

The German retail giant is experimenting with a very different store concept – but Australian shoppers might notice something is missing.

German retail giant Aldi is rolling out a radically different supermarket that could eventually come to Australia.

But if so, Australian shoppers might have to get used to higher prices and the absence of a key feature that precisely masses of people flock to Aldi for.

Aldi opened its first small-format ‘Aldi Local’ store in 2019 in the southern London suburb of Balham. It now has a handful of stores dotted around the UK capital.

Much like in Australia, where Aldi is hot on the heels of Coles and Woolworths, in the UK its aim is to become one of the biggest players, in part by breaking out of its traditional store format. According to some estimates, within a year Aldi could overthrow Morrisons to become Britain’s fourth largest grocer behind Tesco, Sainsbury’s and Asda.

What makes Aldi Local different

While Aldi experimented with a smaller store concept in Australia, with the Aldi “Corner Store” opening in northern Sydney last year, Aldi Local is noticeably different.

When the Balham store opened, an Aldi spokesperson told the UK website Official Retail Journal that its aim was “to help shoppers distinguish between its small urban stores in London and the conventionally sized Aldis”.

Covering approximately 2,000 square meters, Aldi Local is about twice the size of a typical convenience store. But it’s still smaller than an average Aldi – which is barely large – with 300 products having to be discontinued due to a lack of shelf space.

When news.com.au recently visited the Balham store, tucked away on the high street just seconds from the tube, its diminutive size was evident. While a normal Aldi might have five or more aisles, Aldi Local only had three.

The first aisle, like most Aldi stores, was dedicated to fresh fruits, vegetables and meats. In the back was a bakery section, So far, so Aldi.

But elsewhere, the choice of products was much more oriented towards products to eat now or at dinner than to supply the pantry.

At the front of the store was a “take-out” section of sandwiches, wraps, and soft drinks. The meat section had the usual range of sausages and steaks, but there were also dozens of stir-fry kits containing ready-made marinated chicken strips and chopped vegetables that just had to be thrown away. in the wok. Or ready-to-cook slices of chicken and mushrooms.

Despite the store’s lack of space, large portions of shelves were given over to foods designed for entertaining, such as ricotta-stuffed cherry tomatoes and Mediterranean-style falafel bites.

Wine and beer, which are much easier to sell in supermarkets in Britain than in Australia, took up much of an aisle.

The great absence of Aldi Local

But there were a few things missing from this Aldi store – cashiers to begin with.

The local store is a fully self-service checkout.

And the staff in general. News.com.au had just three employees in the store.

But the most obvious absence was the thing Aldi is so popular for: special purchases.

There was no air fryer in sight, or ski clothes, flower pots, or a gazebo for the garden. There were no washing machines, wide-screen televisions, or matching his-and-hers tracksuits. A selection of mountain bikes could not be found. For the Aldi aficionado, that made no sense at all.

And that’s because there just isn’t room for the many and often huge special buys. At Aldi Local, to sneak into the small space, we had to lose the wide central aisle usually devoted to bargains of the week.

“The store does not sell larger items that shoppers would struggle to carry without a car,” an Aldi spokesperson said.

QUT watcher Professor Gary Mortimer told news.com.au that overall it was a good move on Aldi’s part to adapt its offering to different locations.

“Going smaller gets you into inner-city neighborhoods, where rents are higher, but population is denser.”

Professor Mortimer said an Aldi Local could be a good addition for a developer building a block of units who might want a retail choice for younger tenants with higher incomes but not a lot of space.

The concept could work in Australia, he said, but customers should be prepared for the lack of special purchases at those stores.

“I suspect a learning process will ensue. Consumers will soon understand the difference between Aldi, with special purchases) and their convenience store. Kind of like Coles and Coles Express.

Aldi is experimenting with similar stores in Australia

Aldi Local coming to Australia is very possible. The company is already experimenting in Australia with the release of its one-size-fits-all store model.

Last year it launched its Corner Store concept, again in a smaller space than the average Aldi.

There is some overlap between Aldi Local and Aldi Corner Store. They both lean towards takeout food.

But Corner Store is definitely more chic than Local. The entrance to the North Sydney store is dominated by a Sonoma cafe with a selection of danishes.

You can squeeze your own orange juice in store. And the selection of breads was really top notch. Aldi Corner Store offered 12 different types of sourdough; a nearby Woolworths could only handle nine sourdoughs.

Local also more expensive

There was another feature of the local store in London that might annoy some shoppers: the prices.

Industry Review The grocer the prices found in the store were about 3% more expensive than an average Aldi, and some items were a little more than that.

At the time of the survey, a whole chicken, for example, cost £4.19 (A$7.37) at Local but £3.99 (A$7.01) at a nearby full-size Aldi, a difference by 5%.

Aldi acknowledged a “slight price difference across certain ranges”, but insisted the store was still “significantly cheaper than nearby supermarkets”.

Professor Mortimer said innovation at Aldi was important, but the retailer showed signs of copying competitors rather than leading the way.

Self-service checkouts, for example, took nearly a decade to reach Aldi in Australia after Woolworths began rolling them out.

“While it makes sense to sit down and choose which initiatives work, the risk is that as you roll out your version, the market leaders move on.”

News.com.au contacted Aldi and asked if it plans to introduce the Local concept in Australia and how the rollout of the Corner Store is progressing. There was no response.

Read related topics:AldiColesWoolworths

Maria R. Newman