So farewell then – for now – to Paul Foley. The Aldi UK boss’s abrupt departure last week led to speculation that the wheels have come off his juggernaut.
Aldi and co have certainly put on impressive growth during the downturn, but their success was sometimes overstated.
Coming from a low base there was always scope for them to excel. And if not in a recession, when? But they still hold a titchy share compared with the big four.
Despite complaints the dominant grocers have the market sewn up, there is plenty of evidence competition remains red in tooth and claw – you only have to look at the comebacks of Sainsbury’s and Morrisons.
Investors have sought value among general retailers for most of this year, but the big grocers’ resilience shows there is value in them too.
Showdown at Christmas
Once the August bank holiday has passed, it’s Christmas here we come and some retailers have already opened seasonal boutiques.
That may be premature for most, but every retailer is laying plans to ensure golden quarter success. Debenhams, for instance, has been reconfiguring space over the summer (see opposite), ensuring any associated disruption is out of the way and benefits felt when it matters.
But what sort of Christmas might it be? Asda reckons consumers are saving spare cash or using it to pay debt.
The so-called new frugality suits retailers such as Asda because of their emphasis on prices and value. But the recession has forced all retailers to reassess whether they are providing real value and, if in doubt, to rectify things. It has also forced them to keep a relentless focus on costs.
So although low-price specialists are likely to have a good Christmas, many others should be able to present a compelling value proposition. If value was really only about price, wouldn’t Aldi be doing better?
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