Aldi's formula for success: Small selection, low prices

isilzha · 08-10-2008, 07:42 PM

Aldi's formula for success: Small selection, low prices

By Mike Hughlett | Chicago Tribune reporter

August 10, 2008

The shelves at Aldi are stocked with the likes of Clancy's cheese puffs and Millville Kid's Krunch; Cheetos and Cap'n Crunch aren't welcome here. Shopping carts require a 25-cent deposit and, sorry, but no credit card purchases—they cost too much to process.

It's a bare-bones approach to a grocery store, but Aldi has been expanding at a healthy clip recently, grocery analysts say. And a weak economy and soaring food prices can only help the German supermarket giant, which makes its U.S. headquarters in Batavia.

Aldi, which counts the Chicago area as its biggest U.S. market, is a breed of supermarket known as a limited assortment discounter. It carries only a fraction of the items offered in a conventional grocery store, and its shelves are dominated by Aldi's own store brands.

But Aldi claims it offers about 90 percent of the foods people buy most, and at prices up to 40 percent below those of conventional supermarkets, analysts say.

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Food Network Fan · 08-10-2008, 07:51 PM

We have one of those not too far from Charleston. I have never seen anything in there I want to buy.

bakerman · 08-10-2008, 08:25 PM

We have a really nice one here, of the four in the area this is the nicest. I get my organic milk (save $.50 per half gallon) Raisin Bran (about a dollar cheaper than most store brands) dry pasta, cheddar and sandwich cheeses, german chocolate, olive oil (surprisingly good at 1/2 the price of everywhere else), baking supplies, orange juice (premium not from concentrate $2.29, excellent quality), low fat ice cream sanwiches($2 cheaper than skinny cow in the regular store) and yogurt. These are all items that are MUCH cheaper than any grocery around, I usually go in once every two weeks to stock up on these items.

Aldi does carry a lot of heavily processed cheap food which I stay away from, but there are some gems to be found there on a budget. Their brands are among the best as far as store brands go. Around the holidays this is the best place for baking supplies, they often lower prices on many baking items, and bring in a larger variety.

MAC

BerryBaby · 08-10-2008, 08:25 PM

We don't have those out here either. We do have Winco's which are stocked full of national brands at unbelievable little cost. The only drawback, which really isn't one any more, is you have to bag your own groceries. If you bring your own bags, they give you a nickel a bag.

Food Network Fan · 08-10-2008, 08:28 PM

The Aldi here isn't much bigger than a convenience store and it's mostly off brand items.

isilzha · 08-10-2008, 08:35 PM

You have to call it Aldis like everyone around here does. Just like Jewel is the Jewels.

Food Network Fan · 08-10-2008, 08:37 PM

Yeah we know how you Chicago people talk. Da bears.

bakerman · 08-10-2008, 08:37 PM

Yeah that's their business model, they carry 95% store brands and only one size of each item. Their store brand quality is excellent.

This has to be very profitable for them. Did you know that name brand items in the grocery store usually carry only a 2-5% profit margin? The store brands are usually at least a 30% profit margin, that's why you often see store brands strategically placed, also most stores are carrying a larger selection of store brands than ever. My store carries at 10 different private label brands!

MAC