Aldi versus Waitrose: can the discounter do luxury?


Discount supermarket Aldi has announced that it's going upmarket for Christmas. It will launch a variety of posh food for the festive season, including lobster tails, whole legs of Serrano ham, and a three bird Christmas roast including wild pheasant.

So why has the discounter decided to take on posh supermarkets like Waitrose for the festive season?

Bargain basement

Aldi started life as a grocery shop in post-war Germany, and the family evolved their philosophy out of necessity. The frugal post-war years meant small shops storing basic products, and bringing boxes in on pallets to save on staff numbers.

The same basic rules hold true today. Stores have four aisles of pallets, and typically stock 850 basic products - compared to the 30,000 at a typical supermarket. The smaller numbers mean that Aldi has to stick to simple packaging and simple products - and not bother with any of the big brands. The store itself calculates that a typical weekly shop in Aldi costs around £70, compared to £100 at a traditional supermarket.

Growth in popularity

Aldi has been around in the UK since 1990, but as times have got tougher, the brand has seen an enormous jump in custom. It has grown exponentially in recent years, and will open its 500th store later in 2013. Last week it announced sales increases of 33% over the previous three months - far more than any other supermarket - and it has attracted a million more shoppers over the past year.

It has also seen an explosion in the number of more affluent shoppers, who see no need to waste money. As we reported earlier, it has opened this year in a number of staunchly middle class areas, such as Chancellor George Osborne's constituency in Knutsford, Cheshire, safe in the knowledge that while the locals won't admit to shopping at Aldi, they are perfectly happy to do so if it will save them a small fortune.

Joint managing director Matthew Barnes said: "We have opened in affluent locations like Knutsford and Winchester and have quickly won over local customers with our award-winning quality and value."

Aldi has attracted affluent shoppers with quality, and has won a number of awards. Not least it was named Grocer of the Year by the Grocer magazine, and Supermarket of the Year by Which?

A number of the company's lines have taken a raft of prizes. The Grocer magazine awards gave its own brands more gold medals than any other supermarket - including Waitrose and M&S (16 in total). The winners ranged from tea bags and Jaffa Cakes to smoked ham and cheesecake.

It has also gradually added more products to appeal to the high-end shopper, including fine wines, olive oil, and Aberdeen Angus steaks. At Christmas, they are simply upping the ante.


We tend to trade-up our grocery shopping at Christmas. The traditional supermarkets see sales of their high-end range grow, and the posher supermarkets see sales surge. Aldi is hoping to take its share of this surge.

The reward for staying loyal to Aldi at Christmas is far lower prices. The ham will be priced at £49.99 - compared to a typical cost of over £100, and a cost of over £400 at high-end establishments. The Lobster Tails will cost £9.99.

But will it work? Will we be able to feel as if we are treating our families on a special day when we've bought the lobster and the sparkling wine from a discounter? There are some things we are willing to pay a little more for, and you have to ask whether Christmas dinner is one of those things.

Longer battle

We will have to see who wins the battle of the Christmas dinner. However, there's also the question of the longer battle for overall market share. While sales soar at Aldi, they are also rising at Waitrose, which saw sales increase by 10% over the last three months. As the traditional supermarkets struggle, those at either end of the spectrum are seeing impressive growth.

The posh supermarket is still a much bigger player - with 4.8% of the market compared to Aldi's 3.7% share and Lidl's 3.1%. However, Aldi is growing rapidly: its market share was just 2.9% last year. It plans to add 50 more stores in the UK this year, which suggests a far more rapid growth than its upmarket rival, so it may not be all that long before it challenges Waitrose.

But what do you think? Let us know in the comments.

Seven of the craziest supermarket glitches
See Gallery
Aldi versus Waitrose: can the discounter do luxury?

One of the most popular glitches, was a wine deal at Tesco back in November 2012, where a series of offers clashed, leaving a bottle of £9.99 wine selling for £1.50.

The 'three wines for £10' deal apparently clashed with a '25% off when you buy six or more bottles' deal. The 25% was accidentally taken off the original price rather than the reduced one, leaving the wine at rock bottom prices. Deal-hunters cleared the shelves around the country.

Perhaps the most popular glitch from Tesco came in June 2011, when instead of taking £4 off the cost of a £20 case of beer, the supermarket accidentally started selling the cases for £4. The ensuring rush was nicknamed the 'beer stampede'.

Sadly not every supermarket pricing glitch comes with such a happy ending for consumers. In March last year the bargain-hunters thought their luck was in, when Tesco accidentally priced the new iPad at just £44.99 instead of around £650. Sadly it spotted the mistake before shipping the goods. The small print on its website meant it could refuse to sell at this price, and refund their customers instead.

In September 2012, Asda was responsible for one of the most expensive glitches. The Asda Price Guarantee offered vouchers to customers who could have got their shopping cheaper elsewhere.

However, when certain trigger products were in the basket, the supermarket massively under-priced the shopping at other supermarkets, and offered huge vouchers to shoppers. In many instances the vouchers came to roughly the same as the cost of the shopping.

In April, a mistake on their website resulted in Tesco selling 8 packs of Bulmers cider 568ml bottles for £5 - rather than a six pack for £8.

Deal-hunters snapped up the deal online, and had varying degrees of success. Some had their order delivered in full, others had six delivered for £5 - and were able to negotiate their way to another two, while others were offered six for £5 or their money back.

October last year saw one of the most famous glitches, when Tesco Terry's Chocolate Oranges were subject to two deals at the same time, and the price dropped from £2.75 to 29p. There were plenty of people getting chocolate oranges last Christmas.

A buy-one-get-one-free deal went awry at Tesco in March. People putting four tubs of I can't Believe It's Not Butter or Oykos yogurt packs into the trolley were only being charged for one.

Soon the online deal-hunting community was in action, with one person bagging 50 tubs of butter and 22 pots of yogurt for £8.79 - a saving of £133.89.

Read Full Story