ALDI hit ‘slowth’ as competitors started to react

The duopoly of Coles and Woolworths controlled the Australian supermarket category for over a century. It seemed ludicrous that a German discounter could ever challenge them. ALDI opened in Australia in 2001 and flourished, under the radar, with penetration growth significantly outpacing the category.

But by 2016 “Colesworth” took notice. Investing heavily in price cuts, they sold iconic brands on half-price promos weekly. Price, ALDI’s proposition, was challenged. We hit ‘slowth’. Early adopters had converted but ALDI’s march into the mainstream had halted.

Australians had pigeon-holed ALDI as a discount specialty store rather than a main supermarket. We needed to reframe to scale ALDI, keeping pace with an ambitious store opening schedule.

People thought ALDI = discount = compromise

With ‘discount’ came further barriers - better value was ALDI’s strength, but ‘cheap’ was a weakness for the masses. Non-shoppers had farfetched reasons for our discount prices, like “it’s all imported” or “the tuna has less tuna”, justifying their apprehension.

ALDI was foreign, a mystery to the mainstream so these fictions legitimised their resistance.

Research further supported that “Discount” was code for social stigma and compromise.

REPOSITIONING ALDI:

From a DISCOUNT SUPERMARKET To a supermarket with a PROUD DIFFERENCE

We’re taught “you get what you pay for”, that low prices equal low quality, it also cued social class. In Australia, years of conditioning around no frills discounters like ‘Franklins’ or ‘Bi-Lo’ signalled you shopped ‘discount’ because you had to not because you wanted to.

Yet ALDI IS deliberately different – from business model to shopping experience - maintaining high standards but eradicating the inessential to deliver low prices. Cutting waste not corners.

To restore growth, ALDI had to reveal the “secrets” behind its low prices to evidence saving without compromise, reframing saving as an enlightened choice, not desperation. And repositioning ALDI as having a good difference - where low prices meet uncompromising standards.

Phase #1: ‘Good Different’ Launch (2017-May 2018)

Showcasing ALDI’s ‘good’ - uncompromising principles - behind its ‘difference’ - low prices:

- Trolley Dance ALDI shoppers are the most satisfied in Australia despite needing a coin to rent trolley…

- Pasta Sauce Aisle rationalised ALDI’s (‘just right’) range, a strength not a weakness.

- Dave ‘Tester’s Club’ The toughest critics, real customers, optimise ALDI’s products.

- Adult Lab Rats - ‘No Artificial Colours Storewide’

Phase #2: Challenging Colesworth on Price (Oct 2018-March 2019)

Problem: Rewards programs were stealing our thunder. Shoppers didn’t realise they needed to spend $2,000 to get $10 back, ignoring bigger savings at ALDI.

Campaign: ‘Pointless Points’ - We bravely took the giants on - revealing loyalty schemes as a pointless cult. Our loyalty calculator PROVED how little shoppers receive in return for their loyalty.