Page 98 - DMGT551_RETAIL_BUSINESS_ENVIRONMENT

Unit 4: Retailing Structure

Aldi’s shopping trolleys have a £1 deposit system. This ensures that customers return Notes
them after use. This results in fewer trolleys being lost and needing replacing. It also
means that Aldi do not have to employ someone to collect the trolleys as customers return
their trolley to the front of the store.
Another time based management approach that Aldi has adopted to reduce waste is through
its opening hours. Aldi trades from 8 a.m. until 8 p.m. from Monday to Saturday and from
10 a.m. until 4 p.m. on a Sunday. In contrast some of Aldi’s competitors are open for 24
hours. This means Aldi’s sales are spread over a shorter period. It also means that staffing
costs are not incurred at times when there would be fewer customers. As a result Aldi is
more productive during its trading hours. Consumption of utilities for power and heating
can also be reduced through trading only during the busiest times of the day.
How Staff Support Waste Reduction

To underpin these principles Aldi requires competent staff. A combination of total quality
management techniques and a time based management approach help to ensure employees
take responsibility for their job roles whilst minimising the amount of time wasted.
Employees are paid market-leading salaries within the grocery industry.
A comprehensive training programme enables them to become multi-skilled. This means
that staff can undertake a number of different roles within each Aldi store, allowing staff
to be flexible with the tasks they can do. It is therefore easy to produce a staff rota as
employees can fulfil a variety of tasks. Employees can carry out whatever tasks are needed
throughout the day, leading to time-based savings. Training, high wages and a diverse job
role all help to motivate staff. This in turn leads to lower sickness levels and a more
empowered team.
Efficient Processes
The process of buying and selling within Aldi stores also operates on time-based
management principles and means that they require fewer tills and cashiers. For example:
Products display numerous bar codes. This means that cashiers do not have to search for
them and they can be scanned more quickly.

Customers place products back in the trolley after scanning. They then pack their bags
away from the till after paying. This helps throughput. It is also more efficient as another
customer can have their shopping scanned as the previous customer packs. Again, these
cost benefits can be passed on to customers.
These processes contribute to savings which help Aldi to operate more efficiently as an
organisation. The savings are then passed on to its customers. This is in the form of quality
products at prices that are lower than the competitors.
Just-in-time

Aldi uses a just-in-time (JIT) approach to store management by only holding the stock that
it needs. Stock is expensive. The company therefore only buys the stock required at any
given time. When stock levels are reduced an organisations working capital is improved.
In other words, Aldi is not tying up too much investment in stock that is then going to be
held for a long period of time before it is sold to generate income. It also means Aldi does
not pay for large warehouses to store stock or pay for additional staff to monitor warehouse
stock.
From the moment stock arrives at an Aldi store everything is focused on reducing the cost
of holding and managing the stock. For example, products are delivered in display ready
cases. Once the top of the case is removed it can simply be lifted onto a shelf for display to
customers. Units of 12, 24 or more can be handled easily and quickly merchandised.
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