German Food Discounter Aldi Opens in Switzerland
October 28, 2005
While they won't find any Toblerone or first-class cheeses, shoppers at the first four Aldi outlets to open in Switzerland were rewarded on Thursday with cheaper, non-branded cans of corn and jars of marmalade in one of the world's most expensive countries.
Queues formed outside the four shops in northeastern Switzerland before they opened, and one of the purpose-built parking lots at Altenrhein was reported to be full within half an hour as Aldi realized its two-year plan to move into Switzerland.
The arrival of Aldi -- which carved a reputation on its home German market as an aggressive discounter -- has prompted hopes of more competitive pressure, particularly on wholesalers in the closeted Swiss consumer market.
Filling a shopping basket costs Swiss on average about one-third more than in neighboring France, Germany and Italy, causing a cross-border shopping exodus on most weekends in border areas.
Expansion to continue
The German group is planning to open two more supermarkets within a week and seven more in the coming months, Aldi's spokesman for Switzerland, Sven Bradke, said.
The chain's cut-price strategy will be applied on 700 items sold under its own brand name, including many that are sourced from Switzerland, Bradke added. Up to 40 more retail outlets are planned next year as the group expands into French-speaking western Switzerland.
Nonetheless, dairy products and meat are still more expensive than across the border, partly due to Swiss agricultural support. A 250 gram (half a pound) slab of butter costs 2.70 Swiss francs (1.70 euros, $2.06) in Switzerland, compared to 0.75 euros in Germany.
The company has recruited 300 staff in Switzerland so far. However, Swiss trade unions have protested about Aldi's reliance on part-time contracts and the lower pensions the company pays its part-time employees.
Others discounters plan move into Switzerland
Aldi's archrival in Germany, Lidl, has announced that it is also planning to gain a foothold in the Swiss market, and the French group Carrefour returned to Switzerland five years ago after joining forces with a Swiss retailer and gradually expanding to 12 supermarkets under its own banner.
The arrival of foreign supermarket groups has prompted the two dominant Swiss supermarket chains, Coop and Migros, to offer a wider range of own-brand cut-price foodstuffs as well.
Aldi, with gross sales estimated at 22 billion euros, is Germany's fourth largest chain, but has to rely on foreign expansion for growth as German sales have dropped in the last year and some experts predict that the end is approaching for the discount-craze that took hold in Germany in recent years.
The Aldi group, which has outlets in Australia, Austria, Britain, Germany, Ireland, Switzerland and the United States, is owned by brothers Karl and Theo Albrecht, who are rated among the richest people in Germany with an estimated combined fortune of 30.7 billion euros.