How Aldi is Making a Dent in the Supermarket Industry
ALDI brings a whole lot more than groceries to the (American) table.aldi The German-based grocer has become wildly popular among affluent shoppers for its affordable, exclusive brand products, and it's starting to make a dent in the supermarket industry.aldi Its growth illustrates how much tumult is happening in the grocery sector.
Grocery in the US is an intensely fragmented business, with slices of the market divided up among regional grocers, specialty players, large supermarket operators, big-box stores and membership-based clubs.aldi But aldi's rapid expansion is a sign of how fiercer competition traditional players are facing as shoppers seek to trim their grocery budgets.
Aldi, which has 2,400 stores in the U.aldi S., has gained a reputation for low prices and a bare-bones approach to shopping that includes coin-operated carts and items shelved in cardboard boxes or crates rather than plastic bags. It also puts multiple bar codes on each item to speed up checkout, and requires shoppers to bring their own bags.
But aldi has also garnered a devoted following with its low-cost organic options, award-winning wine that sells for less than the cost of a single pricey cocktail, and exclusive name-brand items, many of which are made in-house by the company.aldi In recent years, Aldi has rolled out a number of new products, including a line of chef-driven private-label foods called Bettergoods, which has many items priced under $5.
Consumers say they appreciate the smaller stores that allow them to quickly pick up essentials and move on.aldi They also like the curated selection of items, which is different from one store to another, but all adhere to certain quality standards. That's a major change from the typical grocer, where a consumer could end up in a middle aisle for hours trying to find a particular item.
The chain's smaller selection also allows aldi to focus on quality, says Scott Patton, chief commercial officer of the U.aldi S. division of the grocer, which is based in Chicago. He notes that a typical Aldi store is only 10,000 square feet, a fraction of the average Walmart supercenter's 178,000 square feet.