Well: we haven’t seen discount store excitement like this since the opening of Jack’s in Chatteris, the ill-fated resurrection of Netto, the revelation that the Lidl in Rushden had toilets, the opening of Aldi in Kilburn, or the long-forgotten opening of Lidl Express in Enfield in 2008.

But excitement there is, caused by the opening last week of the first Aldi Local in Balham. Aldi (and Lidl) have been increasing their aggression in the London market and have both had to learn how to flex their models in order to adapt to the simultaneous paucity and expense of locations in the capital.

Lidl has arguably been more impressive so far (I’m thinking Camden and Kentish Town), while Aldi gained a fair bit of press for its ‘convenient’ store proposition in Kilburn.

It also has smaller high street stores in Archway, Kingston and Tooting, but this is the first time that it has opted to use the Local branding to demarcate the smaller store concept and shrunken range from its larger regular stores.

There has been a bit of talk that this marks the retailer’s move into convenience – but such chat is wide of the mark: this is essentially a just a small Aldi with a narrower range and a bespoke checkout configuration to process a larger number of shoppers with smaller basket sizes.

At 6,400 sq. ft., the store is not tiny and indeed feels pretty spacious: with tons of signage and graphics, it is a pleasure to navigate and shop. There is a nod towards different missions with a food to go chiller and ready meals positioned at the front of the store, but the main tweaks seem to be a focus on smaller pack-sizes and formats and the exclusion of general merchandise, meaning that Balham shoppers with their hearts set on angle grinders, fishing rods and giant ceramic frogs will need to look elsewhere.

My sense would be that there are many fewer branded items then in a regular Aldi store, with the proposition being skewed towards Aldi’s PL lines. The ‘British’ identity is rammed home through the copious use of Union Jacks left, right and centre, while the staffing levels appear pretty generous, meaning that availability and standards were really top-notch.

Produce was done pretty well, leading shoppers towards the back of the store that housed an impressive bakery offering. Chilled and frozen were very good, the narrower range (1,500 SKUs compared to the usual 1,900 apparently) not really being an issue as the assortment had been very well curated.

Household and health & beauty were substantial enough to cover off most requirements, while the booze range was pretty hefty, enabling Aldi to showcase its wines with typical panache.

With six manned checkouts, shoppers were being served at an impressive rate of knots, although I was somewhat surprised to see that self-checkouts had not been deployed in this store.

The competitive dynamics should be interesting to see in this location: nearby competition comes from Sainsbury’s a few doors up, Waitrose slightly further up the road and As Nature Intended set to re-open directly opposite Aldi Local fairly soon.

This concept should do well for Aldi: getting smaller will be an enabler for growth in city centres, but I’m not entirely convinced that the ‘Local’ branding is strictly necessary. I think shoppers are wise to the fact that urban stores are smaller with narrower ranges, so the differentiation between Aldi and Aldi Local is perhaps not essential.

Either way, the world of pain being inflicted on the mainstream supermarkets looks set to intensify and Aldi has a new toy up its sleeve to cater for urban shoppers in London and other major cities. This is a great little store.

Bryan Roberts, Global Insights Director

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