Aldi improving supplier relationships to deepen US presence
Aldi, the German discounter is looking to expand its presence in the U.S. by adding 800 new stores over the next five years, the company said during its inaugural supplier summit last week.
Aldi executives said that its store expansion across the U.S. is leading the company to change the ways it typically works with suppliers, Grocery Dive reports.
The retailer’s growth includes deepening its presence in the Midwest and expanding in Southern California, the Northeast, and Phoenix, executives said during the event.
Additionally, the grocer plans to enter new markets, such as Las Vegas, and convert a significant number of stores acquired from Southeastern Grocers to the Aldi format, Aldi USA CEO Jason Hart said during the event.
“Because of this ambitious growth, we’re committed to doing things differently, and after hearing your feedback, we’re more open to long-term agreements than ever before. We need you to feel comfortable to grow with us,” said Joan Kavanaugh, vice president of national buying at Aldi USA.
The discounter surveyed suppliers who stated that they are looking for long-term agreements and joined business plans, for which Aldi said it is expanding its centralized ordering teams, which handle reporting for key product management-related metrics, to provide more consistent ordering patterns.
“We need to proactively identify where we can close any supply gaps between your production capacity and the Aldi customer demand,” Kavanaugh said.
In exchange they asked suppliers to be willing to “double down on innovation, quality, speed to market, availability, sustainability and cost,” Hart said.
Additionally, they stressed that its supplier partners must prioritize sustainable business practices as the discounter focuses on achieving its own sustainability goals.
“Sustainability is no longer a nice-to-have — it is a must-have,” Kavanaugh said, noting that its shoppers are placing more emphasis on buying sustainable products.