Aldi Ltd (UK) is a German-based company. It is a discount supermarket chain owned by two German families. Currently, it has more than 10,000 shops all in twenty countries. Some of the names of the countries where Aldi Ltd.’s operations are highly active are Great Britain, Australia, China, Hungary, Switzerland, Italy, Austria and Slovenia.
In this PESTLE analysis of Aldi Ltd., we will talk about a concern of Aldi Ltd, which is operated in the United Kindom. In the UK, Aldi has started its operation in the year 1990, according to an article by Wikipedia. Here, Aldi won the award named Supermarket of the Year two years, consecutively. In our study, we will look at the PESTLE analysis and then we will conduct a SWOT analysis.
PESTLE Analysis of Aldi Ltd
The study elaborates the in-depth analysis of the external environment Aldi Ltd, commonly known as the PESTLE Analysis.
Political Factors
It is one of the major factors taken into consideration while conducting the PESTLE analysis. The political conflict and vulnerability are increasing all over the world. As a result, the business risk is increasing as well. The situation in the UK and the European Union are not exceptions. These threatening the companies making business in foreign countries. Aldi Ltd in the UK is not an exception in this case.
Economic Factors
The cost of foods has increased by 2.10 per cent in November 2019; if we compare it with the same period that of the previous year. This type of incident pushes the customers to the discount shops. As Aldi Ltd is also a discount shop; it will gradually be achieving more customers.
When inflation increases, the spending on food purchase from outside tends to decrease. As a result, people will not be interested to eat foods in restaurants and spend less. They will be more dependent on foods making at home. This incident will also increase the sales of grocery items in the UK and bring positive effects on Aldi’s income statement.
Socio-Cultural Factors
With a strong distribution channel, it has been distributing the products that fulfil the daily needs of the customers. It ensures the equal distributions of produced products all over the country. Also, the Aldi ensures employment opportunity countrywide which in a sense fulfils social responsibilities.
Competitors have offered a wide variety of services recently. Some are offering 24 hours opening service in the market. To keep the market share, Aldi has to offer the same way. Also, competitors are offering non-food products such as clothing.
Technology Factors
The world has been changing with a fast pace and the technology is taking its place in every industry existing in the world. The shopping industry is changing its form of sales by going online. Aldi Ltd has recently launched its home delivery services in the UK. It has added a great advantage to its sales.
Environmental Factors
Environmentally, Aldi Ltd has brought several impacts in the past years. First, to mention, Aldi Ltd tried to keep carbon emissions as low as possible. They used light vehicles for transportations. Also, they introduced technology that saves energy.
The ongoing crisis of Coronavirus (COVID-19) is another issue. We do now know by how much this disease will harm the country but we know that it will harm to a very large extent. The current effect is big. The sales have been reduced in the market of the United Kingdom, several national newspapers reported.
Legal Factors
Aldi Ltd has faced quite a several issues in the past few years from a legal side. One of the legal disputes faced by Aldi was the finding of olive leaves in oregano products. Also, Aldi was accused of not paying for a negative hour working.
Bottom Line of the Analysis
For the case of Aldi Ltd in the UK, if the political and the environmental factor can be avoided, then the company will be doing well as it has advantages from economic and socio-cultural factor. Also, the technological factor will help Aldi to grab more customer, not the only UK but also in other countries in the world as well. At the bottom line, it can be concluded that, with the recovery of the Noble coronavirus, the company will gradually recover.
Hey Guys! My name is Richard Andrew. I am a contributor to the Strategy Watch. I have finished my graduation with a major in Economics. My interest areas are Economics, Financial Analysis, Stock Analysis, and Business Strategy.