How many SKUs of tinned tomatoes do you need in a retail portfolio? (I am not discussing Passatas, Purees or any other variation on a theme, just tinned tomatoes..I mean, how complicated can that be?).
How complicated? Aldi have 3, Tesco have 36, half of them Tesco own brands.
Everyone understands simplicity beats complexity in the battle for cost leadership; but quality leadership too?
Ever since Aldi and Lidl first dropped anchor, the major retailers took the view if you could match the discounters price with your cheapest on display offer, you were doing enough to hold your own. Price was the variable to match; quality was located higher up the ladder.
Hmmmm....really? Aldi's UK website features 22 separate quality awards over the last 2 years: Cheese, Wine, Baby, Frozen - demonstrating outstanding quality can go hand in hand with portfolio simplicity and low prices.
Category for category, the major retailers can match Aldi's quality and prices; they just struggle to do both jobs in a single product.
When Aldi's Mince Pies beat Fortnum & Mason - all historic assumptions of price / value equations go out the window: Waitrose quality at Asda Smartprice prices. WOW.
If you can't beat them, join them. Fewer products of outstanding quality will drive higher velocities, lower costs and lower prices. It will also mean fewer suppliers. And branded manufacturers better get with the programme because defending inflated brand to own label price premiums will be squeezed like never before.
Aldi - like brands, just simpler. And that's how they do it. Simple really.
PS...It's not all about Aldi....The International Wine & Spirits Competition (IWSC) 2013 awarded Lidl UKs Western Gold Bourbon a Gold Outstanding Award and and ranked it 7th in the top 13 Bourbon's in the world.
Comment: "Concentrated citrus and rich honey on the nose with lovely, light bourbon backing. Slow entry onto the palate with easy flow and deep rich fullness without being heavy. In fact moves lightly and with elegance. Lovely mature flavors with caramel, malt, corn and a hint of smoke. Hints of banana and more honey lead into fine finish."
Award: Gold OutstandingRead more: http://www.businessinsider.com/the-13-best-bourbons-in-america-2013-10?op=1#ixzz2xo1QFbBn