Aldi 3

Company Overview – ALDI:

Aldi Group has been highlighted as a leading grocery chain store with more than 7,500 stores across the globe[1]. The company has its roots in Germany that has remained its strongest market over the years with 40% market share in food retail segment, while aggressive expansion has been undertaken into other European countries and the US[2]. Aldi is a privately held company that operates as Aldi North and Aldi South, with its headquarter in Essen, Germany.

PESTEL Analysis:

Political: • The accession of some major countries like China to the WTO made it easier for Western food retailing companies to penetrate lucrative markets worldwide[3]. Moreover, the joining of the ten Eastern European and Baltic states to the EU in 2004 similarly facilitated the entry of Western companies into these markets[4]. This suggests that supermarkets would be able to strengthen their supply chains by leveraging upon economies of scale and scope, therefore an increase in supplies is expected in the future.

Economical: • The health of economy is a vital influence on the extent of discretionary buying and how much is spent on necessity purchases. The trends in personal disposable income has seen steady rise of 14% in the period of 2002-2006[5]. This growth has been assisted by low unemployment, low inflation and falling interest rates for much of the period. The following graph and the table of figures have been made with the help of data taken from Mintel[6] and ONS[7].
[pic]
|Year |PDI |Consumer |Savings ratio |Interest |
| | |expenditure | | |
| |£bn |£bn |% |% |
|2002 |703 |649 |5.3 |4 |
|2003 |721 |664 |5.5 |3.7 |
|2004 |752 |697 |6.6 |4.4

References: Aldi (2007), Official Website, Aldi Group Abell, D Daily Record (2006), “Tesco way ahead in store wars”; [Streets Edition] Glasgow (UK): Jan 14, 2006. p. 6 Datamonitor (2007), Company report – Aldi, Datamonitor UK Evening News (2001), “Inflation falls to new 25-year low”, JIM STANTON, Deputy Business Editor, London (UK): Feb 13, 2001 Financial Times (2003), “An unpalatable attitude towards food”, Shlaes A., London (UK): Oct 22, 2003 Gagnon, J. & Chu, J. (2005), “Retail in 2010: a world of extremes”, Strategy & Leadership, 2005, Vol. 33 Issue 5, p13-23, 11p HM Treasury (2007), “Fiscal Policy in UK”, www.hm-treasury.gov.uk Herald (2005), “Baby boom gone bust, Policies needed to tackle worryingly low birthrate”, Glasgow (UK): Nov 11, 2005. p. 21 Independent (2004), “The New Europeans; Tomorrow, 10 more members join the European Union”, Stephen Castle, Apr 30, 2004 Independent (2003), “Supermarket groups bank on pharmacy deregulation as OFT inquiry concludes”, Nigel Cope City Editor, London (UK): Nov 21, 2003 Lynch, R Mintel (2006), “Retail Intelligence Report – Grocery Multiples”, Mintel International Group Limited, April 06 Miller, D Mail on Sunday (2006), “Online sales boom boosts Sainsbury 's”, TEENA LYONS, London (UK): Jan 15, 2006. p. 2 National Minimum Wage, (2006), “Low Pay Commission Report – 2005”, www.lowpay.gov.uk ONS (2007), “Office of National Statistics”, www.statistics.gov.uk Porter, M Yamin, S., Gunasekaran, A. and Mavondo, F. T., (1999), “Relationship between generic strategies, competitive advantage and organizational performance: an empirical analysis”, Technovation, 19, 507–518 ----------------------- [1] Datamonitor (2007), Company report – Aldi, Datamonitor UK [2] Aldi (2007), Official Website, Aldi Group [3] Financial Times (2003), “An unpalatable attitude towards food”, Shlaes A., London (UK): Oct 22, 2003. p. 19 [4] Independent (2004), “The New Europeans; Tomorrow, 10 more members join the European Union”, Stephen Castle, Apr 30, 2004 [5] HM Treasury (2007), “Fiscal Policy in UK”, www.hm-treasury.gov.uk [6] Mintel (2006), “Retail Intelligence Report – Grocery Multiples”, Mintel International Group Limited, April 06 [7] ONS (2007), “Office of National Statistics”, www.statistics.gov.uk [8] Gagnon, J [9] Evening News (2001), “Inflation falls to new 25-year low”, JIM STANTON, Deputy Business Editor, London (UK): Feb 13, 2001 [10] Mintel (2006), “Retail Intelligence Report – Grocery Multiples”, Mintel International Group Limited, April 06 [17] Daily Record (2006), “Tesco way ahead in store wars”; [Streets Edition] Glasgow (UK): Jan 14, 2006. p. 6 [18] HM Treasury (2007), “Fiscal Policy in UK”, www.hm-treasury.gov.uk [19] Mintel (2006), “Retail Intelligence Report – Grocery Multiples”, Mintel International Group Limited, April 05 [20] Mintel (2005), “Retail Intelligence Report – Grocery Multiples”, Mintel International Group Limited, April 05