Lording the aisles is a cut price job

Monday 30th April 2018

The out of the blue Sainsbury’s and Asda merger will probably make sense once the regulator is placated with the sale of hundreds of outlets. Asda supplies the lower end of the markets while Sainsbury’s sells groceries to the better off. It’s also just finished digesting a £1.4 bn aquisition of Argos – which, in the Sainsbury view, increases the value of its floor space.

Meanwhile, Asda’s parent Walmart is freer to concentrate on the bigger task of coping with online and Amazon, which have transformed the retail landscape. The gossip is that in these changing times Morrison and the Coop may well be thinking of a little get together.

But the real retail revolution started a long time ago. In 2008 I reported on the opening of a rather strange outfit in the Midlands. It was a cross between a supermarket – because it was a very big shop – a warehouse, because the shopping experience was a bit draughty – and a street market.

Aldi was not a sophisticated offer. Nor was it a one stop shop with recognised brands, and if the items sold out, then that was it. Until the next time, but there was no  guarantee when that would be.

The then CEO of Aldi promised a £30 saving on each £100 weekly shop. There were no buy one, get one free offers – customers were expected to buy only what they needed and as cheaply as possible. And unlike most supermarkets then which were interested in how much they could sell, Aldi’s mantra was to work out how much it cost to sell its products. Each trolley had a £1 deposit, the store’s plastic bags were 3p and the CEO knew how much it cost and how long it took to clean the shopfloor he used to walk everyday.

It was a bit of a downmarket shopping experience, and you would have struggled to recognise the brands  – and certainly not the wine labels. Some of the middle classes who favoured Waitrose wouldn’t have approved.

However, many others of those shoppers were shelving their prejudices and joining Aldi’s aisles.

My report’s money shot, if I can be a bit precious, was the camera pan across the car park  revealing the ranks of shiny BMWs.

And so the Aldis and the Lidls have flourished. Never mind the multi-billion pound mergers, it is and always will be, all about price, just as it was when Jack Cohen stacked his first Tesco shelves in Barnet, 87 years ago.

 

Michael

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