Every food product on sale at Aldi is poked and prodded at a testing kitchen in its divisional headquarters and logistics hub in Naas, and eventually eaten by its management team.
The kitchen is staffed by two professional chefs but it is equipped with domestic appliances only. The idea is to keep the cooking experience as close as possible to the conditions faced by its customers at home.
Today, the kitchen faces an encounter with its toughest customer, chief executive for the UK and Ireland, the English-sounding Irishman, Giles Hurley. Its Christmas range was tested and finalised nine months ago, but two weeks out from the big day, they’re having a reprise for the benefit of The Irish Times.
Hurley, armed with a knife and fork, stands poised like a ninja warrior over a fresh scallop wrapped in Parma ham, cooked in the shell with garlic. It is clear that this product, part of its Specially Selected premium range, is a hit with the boss. As he tucks in, Hurley is almost whispering it sweet nothings.
Three ham-wrapped king scallops for €6.99, take them out of the packet, bang them in the oven, and there’s your Christmas starter done.
Next up at the tasting, it’s a €54.99 Christmas goose. Hurley dumps the scallops and eyes his quarry. It doesn’t stand a chance. He then tears into a bacon-latticed turkey crown like it mugged his grandmother.
In a nod to Aldi’s German roots, he tries a few bites of stollen sweet cake. Mince pies; gluten-free mince pies; Moser Roth chocolates; Christmas cakes from Mayo; puddings from Wexford...
Hurley is deeply imbued with the German retailer’s enthusiastic, let’s-look-forward culture. He didn’t just drink the Aldi Kool Aid. As a near 20-year veteran of its operation, he helped brew it for the Irish market.
Unpronounceable labels
But even discounting for his on-message persona, Hurley really is very much into this tasting business. A former commis chef in his youth, his enthusiasm for the fare on offer is almost like an Aldi Ainsley Harriott’s.
“I really like my food,” Hurley says later. No kidding. He worked for three months at an Italian restaurant in Letterkenny when he was a student, and he also did a six-week cookery course when he left school. Does this mean he is a frustrated want-to-be chef?
“No. I’m just a happy retailer,” he grins back.
It is just over 20 years since Aldi entered the Irish market, befuddling Irish consumers with cheap, unpronounceable continental private labels. Two decades and one catastrophic recession on, it has evolved.
It has a 12.5 per cent share of the estimated €11.2 billion spent in the Irish grocery market so far this year. In recent years, as the economy improved, the traditionally-discount retailer has also gone a bit posh with some of its product ranges, as its managers were at pains to illustrate during the tasting.
“Customers can ‘premiumise’ at Aldi and they won’t pay over the odds for that experience,” says Hurley. Alongside its usual discount items this Christmas, he says Aldi will have “goose from west Cork, Dublin Bay prawns, crabmeat...”
The group, which has about 140 stores in Ireland and 4,000 staff, is also now into its third year of “Project Fresh”, an initiative to drive more fresh food sales, capitalising on a clear shift to healthier eating among Irish consumers.
The initiative includes a revamp of its stores – 65 per cent have been done so far – to better showcase its tightly-curated 1,800 product lines, which are overwhelmingly private label offerings, with a major emphasis on produce.
Larger supermarket groups, such as Tesco, stock multiples of the number of product lines of Aldi and its German discount counterpart, Lidl. The Germans' business models, however, are built around driving efficiencies from the simplicity of the more limited range.
Aldi's efforts over recent years have borne fruit, and it now has the largest market share after the incumbent triumvirate of Tesco, Dunnes Stores and SuperValu. Hurley says the company added 55,000 new shoppers last year and, since 2012, it has doubled its Irish sales while adding only 41 stores in that time.
“A couple of things came together in the last few years, no doubt about it. There was a global financial crisis which forced customers to re-explore their budgets. But alongside that, we redefined what it meant to be a grocery discount retailer, with a larger range and more fresh food.”
He says about half of its sales now constitutes “fresh” items.
“The job isn’t done. Our penetration in Ireland is at its highest ever level. But there are still a lot of people who don’t shop with us. The biggest issue we face now is making sure every customer has an Aldi store within easy reach.”
The group opened just three new Irish stores last year, including Tramore last week (“We’d been trying to get the right site there since 2005!”). But, in 2020, Hurley says it plans to open nine new outlets as it pushes to add up to 50 stores to its Irish portfolio in coming years.
Store portfolio
“We’re excited next year to open in Blanchardstown. There’s a lot of chimney pots out there,” says Hurley. “But we’re actually under represented in all the urban areas – Limerick, Cork, Galway and especially Dublin. We need more stores, but site acquisition is getting harder.”
Hurley says that “any consumer research” shows that the number one reason a customer chooses a supermarket is location, driven by convenience.
“People are time poor. It’s also down to the price of diesel etc. We’re not yet in Bailieborough, or Birr, or Bantry. Those people can’t shop with us. The priority for us is to expand our store portfolio.”
In addition to the 140 Irish stores, Hurley also runs the UK business, which employs 35,000 staff and 860 stores. Ireland and the UK together have sales of £11.3 billion (€13.3 billion) and profits last year of £150 million (€177 million) (it does not break out its Irish performance).
Given his background, Hurley is perfectly suited to an Anglo-Irish job. He was born in London to Irish parents and lived in Surrey until he was in 10. Then he was shipped to boarding school in Kells for a couple of years.
At the age of 12, his parents moved back to Ireland and settled in Donegal, which he appears to consider home. But while his parents lived in Ireland, Hurley completed secondary school back in Britain at Harrow. He then returned to Ireland to attend Trinity College, and lived in Ireland for the next 22 years until he moved back to the UK in recent years to run Aldi from its Warwickshire UK head office.
After all this bouncing about, Hurley feels Irish but his accent is quite English, and quite proper. Confused? Hurley isn’t. He recently told a British journalist that he “bleeds green”. “Ireland is home,” he added this week in Naas.
After leaving university, Hurley taught English for a year in Lanzhou, a large industrial city on the Yellow River in China. He then returned to Ireland to train in McDonald’s fast food chain’s graduate programme.
“I worked in Liffey Valley just after it opened, and then I worked in Tallaght, in the drive-thru. Everybody who has been through McDonald’s will tell you its training is good.”
After a year, he moved on to Aldi’s graduate area manager training programme, which put him through the gamut of buying and operational positions. The company had just five Irish stores when he joined, months after its launch here. By the age of 24, he was running its stores in the northwest of the State. “I was home.”
He held a succession of senior group management jobs, including managing director of the UK business in 2015. In 2018, he took over his current role.
Running a major grocery retailer is multi-faceted. For example, beef farmers have for months been expressing unhappiness with the prices they receive for their wares from all major retailers and processors. Last week, one of the locations they chose to picket was the Naas distribution hub. Hurley tiptoes through a discussion on the farmers’ grievances like a politician, although he insists the picket didn’t affect its operations.
Beef sector challenges
“We pay fair prices to our producers,” he says. “We wouldn’t have over 200 Irish suppliers if we didn’t. We have a track record of fair dealings.”
But doesn’t refusing to break out your Irish financial performance fuel mistrust with beef farmers and other producers? They don’t know how much you’re making in the Irish market. In an information vacuum, they will project.
“We’re a private business. We just don’t break it out. We demonstrate our commitment to Ireland in other ways, through our €1.2 billion of capital expenditure here.”
Angry beef farmers don’t care about capital expenditure. Will you accept less profit so they can have more?
“With commodity prices, it isn’t as simple as that. There are enormous challenges in the beef sector for many reasons. It has been going on for some time but has materialised really heavily recently. The livelihoods of Irish farmers are at stake. We are supportive of the beef task force’s efforts.”
The farmers he deals with in the UK are probably far less bolshier, although they are probably too preoccupied with Brexit.
Hurley’s Anglo-Irish role, as well as his Anglo-Irish background, must give him a unique insight into the main differences between Irish and UK shoppers. What are they?
“Irish people are willing to spend a higher proportion of their income on fresh food. It’s an appreciation of a product, how it’s made, and where it comes from. It isn’t quite the same in the UK. It is important there too, but there is something about food provenance in Ireland that is in our DNA.”
Aldi has dipped its toe in the water in the UK with non-food online retailing, such as wine and its centre aisle “special buys” such as electronics. But there is no sense from Hurley that this is about to be rolled out to Ireland.
“There is still a lot to do from a bricks and mortar perspective. That is our focus.”
Christmas is drawing in but all planning for that was finished months ago. Now it is just about execution. Conversation with Hurley returns to expanding its Irish store network, and the difficulty of finding suitable sites.
Then there is the problem of gaining planning permission on those sites over the strategic objections lodged by its commercial rivals.
“The planning environment is challenging. The reality is our competitors do object, but those objections are frequently frivolous or technical,” says Hurley. “The objections might slow us down. But they’re never going to stop us.”
CV
Name: Giles Hurley Age: 45. Position: Aldi chief executive for the UK and Ireland. Home: Warwick and Dublin. Family: Married with four kids. Something about him we might expect: “I play touch rugby.” Something about him that might surprise: “I was an English teacher in China.”
