In a few weeks Aldi’s luxury Christmas range will hit the shelves (the star of the show this year is Beluga caviar at £9.99 for 20g), but that doesn’t mean Aldi is holding back on the good stuff.
Yesterday saw ads in the Daily Express and the Daily Mail herald its first ever range of organic vegetables. The ads also encouraged shoppers to “enjoy a taste of the exotic” by offering shredded kale and pomegranate seeds and showed off some fancy new additions to Aldi’s popular Specially Selected premium tier (sales of which are up 74% year on year).
Christmas aside, this is without question Aldi’s poshest move yet. But it also raises questions, too. Not least for its rivals.
It’s unlikely Asda will blink. Its core demographic is not overly concerned with the price of shredded kale and pomegranate seeds. The middle market, Tesco, Sainsbury’s and Morrisons, are more likely to look at this move with a weary despondency, especially off the back of yesterday’s Kantar figures, which saw them suffer sales slumps of 3.6%, 3.1% and 1.8% respectively.
A quick price check versus Tesco shows that the differential on the featured products ranges from 12% cheaper (on the Pomegranate seeds) to 35% cheaper (the organic carrots). That range of discount is fairly standard for Aldi prices versus Tesco. Although Aldi hasn’t quite managed to bring the price of an organic carrot down to the same price of a regular carrot at Tesco.
Nonetheless, 35% is still a lot cheaper. “We know our shoppers want to buy more organic products, but price is often the reason why it’s not a regular purchase. This is why we’ve launched a 100% British organic range at an affordable everyday low price,” says Aldi’s joint MD of corporate buying Tony Baines. Whether it’s affordable enough to take organic vegetables mainstream remains to be seen, but you can’t knock the discounter for making the effort.
Back to its rivals, and taken in isolation Aldi’s move into organics and so-called exotics could be seen as minor. But as a detail to add into the bigger picture, offering an organic range is significant. The discounters’ growth has been driven as much by word of mouth as anything. “Oh, they do kale now? Is it organic?” might be all it takes for a few more shoppers to give them a try. So although the middle ground won’t exactly panic when they see the ads, it’s another itch for them to scratch.
At the premium end, Waitrose is sailing along happily, carving out record market share (5.2%) and enjoying a healthy uptick in year-on-year sales (6.8%). When he goes on record, Waitrose CEO Mark Price sounds relaxed about the threat of the discounters. As well he might, given the figures.
Even if Aldi’s move could be interpreted as a specific attempt to keep more of the polarised shopper’s wallet in Aldi before they head to Waitrose to pick up the tahini, Price is unlikely to be overly concerned. In Waitrose, 200g of kale costs £1. In Aldi, it costs 79p, which, although significant, isn’t jaw dropping. And as long as the numbers at Waitrose keep going up, why should he worry? Especially since his strategy of refusing to be distracted by the discounters and play to Waitrose strengths continues to be an effective one.