Aldi grows on the consumer shift to private label

Private-label products are at record highs, says Giles Hurley, CEO of Aldi UK and Ireland, in a sign that economic trouble remains a reality for many people despite a cooling in inflation. 

Why private labels matter

To an extent, private label products are the enemy of brands (other than the brand of that supermarket) and during lean economic times or when everything is getting more expensive, private labels tend to encroach on traditional brands’ customer bases. 

The Aldi equation

• Now the UK’s fourth largest supermarket, over half of everything bought at the German-originated discounter has been from its private labels, the supermarket told the BBC, with “own label products growing at twice the rate of branded goods,” said Hurley.
• Two thirds of UK households are now buying from Aldi, according to Hurley, with many of those purchases made up of Aldi’s typical mix of own-brand products. Eyeing a greater opportunity, Aldi said on Monday that it was planning to open a further 500 UK stores in the coming years.
• This week, the company posted strong results even if it noted that many shoppers continued to be “under real pressure”. However, there is now pressure on the discounters as traditional supermarkets also accelerate their price cuts; for the first time in months, Aldi and Lidl lost some ground to traditional rivals, according to Kantar data reported by the FT.

 Key quote

“Why would [shoppers] go back?” - Giles Hurley, CEO of Aldi UK and Ireland. 

Sourced from the BBC, FT, WARC