Can Discount Pricing Be A Comeptitive Brand Strategy? An Evaluation of Aldi

The aims of this exploratory research are to investigate the viability of Aldi’s discount pricing strategy in the context of UK grocery retail and examine the impact of this approach on customer’s perceptions of and loyalty to the Aldi brand. Using 191 self-completed questionnaires with Aldi customers in Edinburgh, Scotland, the research found that discount pricing was a useful competitive strategy to drive footfall to the Aldi store particularly if combined with perceived value for money. The research revealed that price and value for money influenced brand perceptions but did not necessarily make customers loyal to the brand. With regards to the research hypotheses, H1 discount pricing plays an influential role in the brand loyalty of customers was not supported and H2 customers patronise Aldi because of price was supported. The variables age, gender, income, spending on groceries, preferred grocery retailer and frequency of shop proved significant in a customer’s patronage of Aldi. Given the context to this research, specifically the growth of discount retailing in the UK, mirrored by the increasing economic pressures on customers, the exploratory findings of this research should prove useful to academics researching the discount grocery retail sector and practitioners wishing to influence the brand loyalty and store patronage of their customers.