ALDI Corporate Responsibility Strategy Madeline Bird Elaina De

ALDI: Corporate Responsibility Strategy Madeline Bird, Elaina De. Horatius, Kate Morrison, Helen Phillips-White

Theme Aldi must capitalize on opportunities presented by the current zeitgeist of corporate social responsibility in the United States in order to increase its visibility and enhance its public image.

Background • Current Sustainable Business Practices Organic product offerings • Living wages/benefits • • Current Low-Cost Business Practices Low property costs • Low labor costs • Limited product assortment • • Marketing and Public Relations • • • Current policy-no publicity Cultural Values - vanity highly discouraged Customer Trust - built through simplicity

Analysis P ● S E ● ● Cheap prices, good quality Low operating cost International expansion Existing CSR practices ● ● ● No advertising Low market share Ambience S ● Growing demand for packaged food and beverages ● Increase in popularity of social responsibility T ● Online shopping market is increasing Self check out in most retail grocery stores W ● ● ● No legislation requiring CSR Increasing HH disposable income in UK and USA Increase in drive for sustainability O ● Increasing PR presence to increase awareness T ● Competition

Value Chain Analysis Aldi’s value creating activities Low product cost Good quality Location strategy Existing CSR Differentiation opportunities for improving customer value Lower costs Increase quality Expand locations Increase awareness Sustainable differentiation and added customer value Decreases profits Increases cost and investments Fixed annual cost Lower product cost Higher quality product Ease of accessibility Sustainability exposure

Recommendations • • Attain B-Corp Status Increase Public Relations Initiatives • • Develop strict PR guidelines Encourage media coverage Do not increase marketing activities Let actions speak for Aldi

B Corp and Aldi • B Corp For profit companies, certified by B Lab • Meet standards • • Social/environmental performance • Accountability • Transparency Aldi • Currently meeting and exceeding standards Becoming a B Corp will • • • Generate press and increase positive brand reputation Save money which is in line with operational model Hold Aldi accountable to CR principles (est. 2015)

How to Become a B Corp • Meet Performance Requirement • Complete B Impact Assessment 80/200 • Governance • Workers • Community • Environment • Meet legal requirement • Determine path for corporate structure and state of incorporation • Make it official • Sign B Corp Declaration of Interdependence and Term Sheet

Governance Ex: Has the company worked within its industry to develop social and environmental standards for your industry? • Environmental • Aldi has increased # of sustainably produced cocoa products • Similar increases in seafood, coffee, etc. • Social • Partnerships with Feeding America and Action for Healthy Kids in California

Workers • Ex: Based on the results of your employee satisfaction assessment (conducted within the past two fiscal years), what percent of your employees are “satisfied” or “engaged? • High employee satifaction is part of Aldi’s culture Employee Satisfaction Year 2014 % of employees whoagreed or fully agreed with statement: 80. 25 "In general, Aldi is an excellent employer"

Community • Ex: What % of management is from underrepresented populations? (includes women, minorities, people with disabilities) • Over half of total employees are female • There is room for improvement in management representation Women in Management Positions Year 2015 Share of female employees in the total number of 65. 91 employees in % Share of female employees in the total number of employees in management 39. 21 positions (store management and above) in %

Environment • Ex: Does your company monitor and record its universal waste? • “Avoid, reuse, recycle” strategy Recycles nearly 100% of transport packaging • 81% of stores donate unsold food •

Value Added • Macro trend Importance of purpose as a purchase factor has risen 26 percent globally since 2010 • 88 percent of research shows solid ESG practices result in better operational performance • • Reputation • “Word of mouth is becoming your number one marketing tool” -Kaspar Ulf Nielson • 73% of global consumers would recommend companies they see as delivering on CSR • CSR efforts (citizenship, governance, workplace) make up 41. 2% of a company’s reputation

Sources Aldi and Lidl. (2015). Tomorrow, Not Quite The World. The Economist. Retrieved from http: //www. economist. com/news/business/21646224 -german-discounters-successful-business-model-only-stretches-so-fartomorrow-not-quite Aldi einkauf Gmb. H & co. o. HG: Retailing - company profile & SWOT analysis. (2015). Basingstoke: Progressive Digital Media. Retrieved from http: //search. proquest. com/docview/1652863218? accountid=14270 ALDI US - Corporate Responsibility. (2016). Retrieved October 02, 2016, from https: //corporate. aldi. us/en/corporate-responsibility/ ALDI SOUTH GROUP corporate responsibility report - Supply chain. (2016). Retrieved October 02, 2016, from https: //cr. aldisouthgroup. com/en/cr-report/facts-figures/key-figures/supply-chain/ Assess Your Impact. (2016). Retrieved October 03, 2016, from http: //bimpactassessment. net/how-it-works/assess-your-impact ALDI SOUTH GROUP corporate responsibility report - CR Report. (2016). Retrieved October 02, 2016, from https: //cr. aldisouthgroup. com/en/cr-report/ Caruso, A. (2016, January 12). Aldi Hits 'Refresh' So You Can, Too. Retrieved October 02, 2016, from https: //corporate. aldi. us/fileadmin/fmdam/news_and_awards/Press_Release_2016/Feel_Good_Foods_Release_Draft_FINAL. PDF Corporate Responsibility Principles of the ALDI SOUTH Group. (2016). Retrieved October 02, 2016, from Corporate Responsibility Principles of the ALDI SOUTH Group. (n. d. ). Retrieved October 01, 2016, from https: //corporate. aldi. us/fileadmin/fmdam/Corporate_Responsibility/CR_Updates/CR_Principles. pdf

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