While Wal-Mart and Target boast of plans to open smaller stores to squeeze their way into U.S. cities, one of their likely competitors is already there: Aldi.
An article in The New York Times fairly marveled at how Aldi has in recent years sneakily established a foothold in many cities -- including a location that opened in February in Queens, NY with a second one in the city planned for the Bronx later this year. The entry comes despite being non-union, one of the largest retailers worldwide, and foreign to boot.
But much of the article largely served as an introduction to the German-based limited-assortment grocer, which now counts more than 1,000 stores across the country. After opening its first store in 1976, its growth has accelerated in recent years to between 80 to 100 stores annually.
The stores -- ranging from 10,000 to 17,000 square feet -- carry about 1,500 of the most popular grocery items. About 95 percent of the mix is private label. It also has many quirks largely to keep prices low, including charging a quarter to get a shopping cart with a refund upon cart return. It also has no butcher or bakery, sells fruit by the bag to speed checkout, and it doesn't advertise.
The low-prices are expected to make Aldi most appealing to city dwellers. The company claims its discounts are up to 45 percent off competitors, although analysts told the Times the discounts are probably closer to 20 percent on average.
The Times article still wondered whether the limited assortments and dearth of national brands would work in cities.
A query on consumerist.com exploring the Aldi concept received more positive than negative comments.
Said one, "I've gotten better food at Aldi's than I have at the grocery store my husband works at, and that's saying a lot. I've had some of the best apples, bananas, oranges from there. Granted they don't get fancy, but I don't need an organically grown piece of fruit to get what I need in my diet."
Another wrote, "We buy lots of fresh produce, a small amount of meat, some fresh and high quality dairy items, etc... Aldi just doesn't have the kind of products we buy, and the ones they have that we do use aren't that great. I think if you buy lots of canned and prepackaged stuff, it's a good place to go to save some cash."
- Where Wal-Mart Failed, Aldi Succeeds - The New York Times
- Is Aldi Just Trader Joe's Without The Marketing Budget? - consumerist.com
- NYC unfairly biased against Wal-Mart? - New York Metro
- Retail Forecast: Walmart Versus Aldi or Battle of the Grocery Titans - Gerson Lehrman Group
- Aldi expansion will reach into N.Y.C. - The Packer
- Aldi to open Medford store this summer - Boston Business Journal