Aldi Inc. - Optimizing Profits in Economic Recession

            
 
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Case Details:

Case Code : BSTR348
Case Length : 11 Pages
Period : 2007-2009
Pub Date : 2009
Teaching Note :Not Available
Organization : Aldi Inc.
Industry : Retail
Countries : US, Germany

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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"They love competition, and this economy [US economy] suits them very well. It's almost as if, the worse it gets and the more competition there is, the more likely you are to see Aldi start to spring up." 1

- Terrie Ellerbee, Associate Editor for the Supermarket Trade Publication, the Shelby Report, in July 2009.

"People want to stretch their dollar and want to get bang for their buck, so they're trying us. And it's certainly the quality that's bringing them back." 2

- Heather Tarczan, Spokesperson for Aldi, in July 2009.

Introduction

The US-based Aldi Inc, part of the Aldi Süd division of the Aldi Group (Aldi) based in Germany, was named as the 2009 Retailer of the Year by PL Buyer3 magazine. During the time of recession in the US, when many retailers faced losses, Aldi experienced an increase in consumer footfall in the US. Aldi's sales in the US increased by 21 percent in fiscal 2008 as compared to fiscal 2007.4

Jason Hart, President of Aldi, said "Prior to the economic slowdown, we were prospering. But now we're seeing customers looking to save money, and our foot traffic has increased. There seems to be more demand for our stores, and people don't want to sacrifice quality."5

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1] Dawn Kent, "Aldi Looks at Pelham after Crestwood Opening," www.al.com, July 19, 2009.
2] Dawn Kent, "Aldi Looks at Pelham after Crestwood Opening," www.al.com, July 19, 2009.
3] PL Buyer is a monthly magazine published by the US-based BNP Media. It provides in-depth profiles of the industry's most successful retail chains, category reviews on all product segments, and special reports on key areas of retailer interest (Source: www.privatelabelbuyer.com).
4] "Bare-Bones Aldi Expands as US Shoppers Struggle," http://www.thelocal.de, August 24, 2009
5] Steven Gray, "Aldi: A Grocer for the Recession," www.time.com, October 28, 2008.


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