Interview: Aldi adapting the way it manages its workforce

Aldi is in the midst of a workforce management refresh and, following the successful deployment of biometric clocks in stores, it is now rolling them out to the supply chain and logistical operations.

Chris Day joined the supermarket as national IT analyst earlier this year to lead the project, which sees Aldi make use of JDA Software suite of workforce management tools – a step change away from using its in-house team for all behind-the-scenes retail system development.

The new clocking-in machines are seen as more accurate than the card-based sign-in format previously used, and unlike the historic system they are not open to people signing in on behalf of their colleagues. The data captured at the machine is sent to Aldi's servers where pay codes are identified and those who are paid by the hour receive their correct remuneration.

"The feedback in terms of what it can do for area managers is they don't have to travel around making sure people's times are correct – the system can do that for them," Day noted, adding it saves time and money.

"What I've been brought in to do is roll it out to the logistics departments. We have a distributon centre for each region and we're looking to test it [in Chelmsford] and use it with warehouse and transport employees."

Day says Aldi is working with JDA to make sure it is a case of "business as usual" while the deployment takes place and there are plans to upgrade the software used, next year, once a number of the distribution centres have undergone the transition. Chelmsford's go-live date is scheduled for next February, followed by the Scottish and Irish regions later in the spring.

He estimates team leaders within Aldi are spending five hours a week on Excel, using a manual system for measuring employee hours, but the work his team is doing is "taking that away".

The partnership with JDA is indicative of a shift in thinking at Aldi UK, brought about by its rapid growth in the UK. And if JDA marks the first foray into using non-standard Aldi software, then a project to implement a new payroll system through NGA, called ResourceLink, marks the second move in this direction.

Day said: "We had a system called Pegasus before but because we've grown so much we needed something else – Pegasus couldn't do what we wanted it to do.

"I come from an SAP background in Tata, working on a centralised payment system, I would be very surprised if we don't get there in the next few years," he added, suggesting that ResourceLink will be a gateway to using a bigger player as standardisation becomes increasingly important.

The latest grocery share figures from Kantar Worldpanel, for the 12 weeks ending 6 November 2016, show that although the discount retailers are growing at their slowest rate since 2011, both Aldi and Lidl are still attracting new shoppers – helped by continued store openings. Aldi grew sales by 10.2% year on year, increasing shopper numbers by 547,000 which was a bigger jump in visitor numbers than any other retailer.

Lidl sales went up by 6.1% which was a slower rate than in recent months but still significantly above the overall market growth.

The Kantar figures over the last six years have been defined by a squeezed middle grocery market and strong growth from the premium end, for example Waitrose, and significant market share gains from the discounters, Aldi and Lidl – and in more recent times, Iceland. Growth for those two German players in the UK has slowed of late, but there performance over the last decade has reshaped the entire sector and been a contributing factor in Tesco, Sainsbury's, Asda and Morrisons embarking on some heavy discounting.

Day explains that since joining Aldi, there are clear messages from the top being filtered down so employees know how the company is performing.

"[This information includes things such as] 'here's how we are doing' and 'here's our performance', and we're getting all the Kantar data coming through via management meetings.

"[Internally] we're saying we're taking market share off everyone but we've got to be careful of what Lidl is doing. That's the big thing. It's always a case of reviewing what we're doing well compared to what others are doing."

He added: "There's a really good focus on targets and what we want to do rather than looking over our shoulder at anyone – although there's always someone to watch."

Approaching 800 stores now, Aldi is on course to be operating its target of 1,000 shops in the UK and Ireland by 2020, while other recent noteworthy moves from a technology perspective revolve around eCommerce. The retailer started selling wine online in the UK in January this year, in its first move into the digital space in the country, while the business recently announced that an eCommerce operation will be launched in China in 2017.

Christmas ads

In recent years, the Christmas battle for market share and sales which the sector currently finds itself embroiled in, with three weeks left until 25 December, has been accompanied by a different kind of competition: the battle to produce the best festive ad.

Aldi's 'Kevin the Carrot' ad – which is narrated by actor Jim Broadbent – has faired well in recent surveys, with market research agency Opinium ranking it the fifth most enjoyable ad of the 2016 festive season, behind John Lewis, Marks & Spencer, Heathrow and Waitrose. Like many retailers, the protagonist of the ad has been given its own Twitter account and the theme of the ad was unveiled via Facebook and YouTube before its first airing on TV.

Frozen food supermarket Iceland launched its Christmas TV marketing campaign today (Friday 2 December) with a veiled criticism at the raft of retailers which launched their festive ads in the autumn. Nick Canning, joint managing director of Iceland, said it had received shopper feedback that no-one wants to see a Christmas advert at the start of November.

"They want to enjoy the autumn and save the festivities until nearer the big day to avoid Christmas fatigue, so we've listened to them and taken the bold move to put our ad out and Christmas decorations up later," he remarked.

"Our sales from last year showed that 56% of our Christmas transactions don't take place until December itself anyway, so why hassle our customers for months beforehand?"

It is yet another example of the fierce competition the grocers face in today's market, but Aldi is looking to leverage its festive campaign for a wider cause and has built its Christmas campaign into its corporate social responsibility strategy by selling 'Kevin the Carrot' soft toys in its stores, with the proceeds going to charity partner, Barnardo's.

Prior to arriving at Aldi, Day worked at Tata Steel for six years, latterly as HR information management analyst, in what clearly must have been a turbulent period for the business. Since the spring its Indian ownership have been undertaking a review of the business's operations as it battles with debts and continued losses.

There's a big job for him ahead as he looks to help standardise some of the workforce management systems and roll out the JDA and payroll technology deep into the Aldi business, but he feels positive about his first seven months at the organisation.

"It's been fantastic to be embraced in an organisation where you don't have the worry of redundancy every six months," he said.

"It's very professional and a different type of management structure to Tata Steel – it's not what I call 'a shouting organisation'. It's all talked through. The business knows what it wants."