Aldi Broods Over Drugstore Brands

This is the third article in a series introducing the new magazine Global Retail Brands. Throughout the week we will feature one article a day from the new publication – In this article Matthias Queck, Research Director for Planet Retail examines the evolving strategy at Aldi.

aldi-bagAldi Broods Over Drugstore Brands

German hard discounter Aldi is reportedly planning to add manufacturer brands to its drugstore ranges. Lebensmittel Zeitung has learned that Aldi Nord and Aldi Süd are negotiating with major manufacturers such as Beiersdorf (Nivea), L’Oréal, Henkel, Procter & Gamble, Colgate-Palmolive and Nestlé. The latter, however, has denied any talks while the other companies have made no comment on the report.

More brands mean that Aldi is at greater risk of price attacks from rivals. The discounter has recently lowered the prices for the Heinz baby food range in the UK.

To date, Aldi’s drugstore ranges have consisted exclusively of private labels, despite the presence of several national brands in other categories. Aldi wants to revive sales in the category by attracting more young families and by poaching customers from drugstores and rival discounters. In order to market the move, Aldi is even considering highlighting branded products in its advertising for the first time, including in TV spots.

The move should not come as a big surprise, following the introduction of selected leading brands by the discounter in various countries. When it comes to the drugstore categories, Aldi Süd has been offering a relatively broad range of branded goods in Hungary for some time, including brands from Procter & Gamble, Johnson & Johnson and Henkel. It is part of Aldi’s international efforts to become a one-stop shopping destination.

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