Every time I walk out of my local Aldi grocery store I can’t help but flash a big smile thinking about how much money I’ve just saved. If you haven’t shopped an Aldi’s recently, then you’re missing out on one of the best kept secrets in the entire grocery industry. Business analyst have taken notice and think Aldi’s could become a dominant player in the discount grocery business.
When you first walk into an Aldi grocery store you may be surprised by the spartan interior – no flashy window displays, no large sales signs, no extras like photo processing or floral sections. Most of the products are displayed in the same cardboard boxes they were shipped in. Instead of Kellogg’s Raisin Bran you’ll find Millville Raisin Bran. Instead of Hunt’s chocolate pudding you’ll encounter Mr. Pudding chocolate pudding.
What you will find in your local Aldi’s are rock bottom prices, from canned goods, to dairy products, to produce.
Aldi’s is a German owned (Aldi’s is short for Albrecht Discounts) deep discount , no frills grocery chain. It’s owned by the same people who run the popular Trader Joes food stores. The secret to Aldi’s success and rock bottom prices is their cult-like obsession with cutting costs. This cost cutting focus derives from Aldi’s post World War II founding when post war customers with little money were concerned with purchasing good food at cheap prices.
Some of the ways in which Aldi’s cuts costs include:
Reduced Labor Costs: When you walk into an Aldi supermarket you’ll be surprised at how few employees are in the store. There are no butchers, bakers, or pharmacists. Customers bag their own groceries. Want a shopping cart? You must insert a quarter which you’ll get back when you return the cart. This reduces the need for employees to walk the parking lot returning carts to the store.
Limited Selection: Costs are further controlled by the fact that Aldi’s selection is more limited than a typical grocery store. Aldi’s typically carries 1300 items compared to the nearly 30,000 items carried at a typical supermarket. These are generally fast moving items which helps prevent loss associated with spoilage and the extra rent needed for larger stores. Money is also saved because less labor is needed to stock fewer products.
Smaller Stores: Aldi stores tend to be much smaller in size than your typical supermarket. As a result rent and utility costs are much lower as well. Furthermore, store hours are more limited, usually 9-7pm, saving on costs even further.
Cash and Debit Cards Only: Cash is king at Aldi’s. Unlike other supermarkets, you can’t use credit cards when you shop at Aldi’s. This saves the store from paying high credit card transaction costs.
High Quality Store Brand Products: Aldi stores carry only a few national brand products. Instead it focuses on its high quality line of store brands, from Millville cereal to Sweet Harvest fruit cocktail. These store brand products harken to its European roots where store brands are known for their popularity and consistent high quality.
Aldi store brand products must be of high quality because the grocery chain’s reputation depends on them. In order to keep customers coming back they must provide great tasting products. Aldi’s conducts weekly blind taste tests of its store brand products comparing them to their name brand counterparts. So confident is Aldi’s of its products that it offers customers a money back guarantee on all store brand products.
All of the Aldi’s cost saving measures are passed along to the consumer in the form of super low prices.
I save consistently at Aldi supermarkets. I enjoy their store brand products and save big on juice, cereal, snack foods, canned goods, dairy products, vegetables, and fruit. Due to their more limited selections I can’t fulfill all of my grocery needs at Aldi’s, but I’ll typically save between 30-50% off of comparable supermarket prices.
This seems to be in line with Aldi’s own estimations of savings. They claim that you can save 40-50% at Aldi’s compared to conventional grocery stores, and save 16-24% over big discount stores.
So if you’re looking to cut costs and save your family money, check out your local Aldi grocery store. You’ll be pleasantly surprised.
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