International Retail Giants Steps Up Global Expansion in US & UK. What are the Implications for Nigeria?

Discount grocery chain Aldi has unveil plans to invest more than $5 billion to open nearly 900 stores and remodel hundreds more in the U.S. and another 300 stores to its UK operations.  Aldi said it is expected to have 2,500 locations across the U.S. and 1,000 in the UK by 2022.

The expansion, over the next five years, puts the German grocer on track to becoming the third-largest food retailer in the U.S. by store count, behind the larger Wal-Mart Stores Inc. and Kroger Co., and a growing threat to traditional food retailers.

In the U.S. and UK, the German discount supermarket chain Aldi is creating 25,000 and 4,000 new jobs respectively over the next five years, a move that will deal a sharp blow to some of the U.S. and UK’s biggest retailers from fierce competition for market share.

Executives at Wal-Mart and Kroger have been preparing for the growth of the discounters for years. Wal-Mart has been sprucing up its stores and slashing prices on some products in select markets, while Kroger continues to drive down costs to compete.

The discounters could have a big impact on the U.S. and UK grocery market as they did in Europe. Their market share there has steadily grown while traditional supermarkets have seen theirs fall.

“It should absolutely be more than scary to traditional grocers and retailers,” said Mikey Vu, a partner in Bain’s retail practice.

The company said it was ramping up its staffing to match rising sales, with new jobs including store assistants and deputy store managers.

Aldi, which attracted nearly one million new customers last year “The success of Aldi is due to the hard work and commitment of our employees, and they are crucial to our future expansion plans,” said Matthew Barnes, the group’s UK and Ireland chief executive.

It is also eyeing up opportunities on the other side of the Atlantic. Aldi is well aware of the competition and it is prepared. Scott Patton, an Aldi divisional vice president, said its private-label offerings makes the grocer stand out from competitors. “Many of our competitors are trying to copy our blueprint,” said Mr. Patton. “We have a tremendous head start on them.”

Aldi was founded more than a century ago when Anna Albrecht opened a small store in Essen, Germany. Her sons, Karl and Theo, took over in 1948 and quickly expanded. In 1962, the name became Aldi, shortened from Albrecht Discount.

As international retailers continue to search for new investment destinations, Nigeria with a population size about 180 million and an expanding middle class of about 80 million presents tremendous opportunities. The key question for retailers in Nigeria is how prepared are we for the coming onslaught from more international competition with deep pockets?

This post was syndicated from FOX BUSINESS and INDEPENDENT






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