Aldi Sees Lots of Room for Growth
By George Anderson
It primarily offers private label goods. It charges a quarter to rent a shopping cart. It doesn’t take credit cards. Its stores are small, no frills operations and they’re closed on Sundays. Customers bag their own groceries and pay 10 cents a shopping bag. It is Aldi and with prices between 25 and 40 percent below most others in the grocery space, it is kicking retailer competitor butt all over the landscape.
David Livingston, principal at DJL Research and a member of the RetailWire BrainTrust, told the Detroit News, “Aldi has taken efficiency to a whole new level. They’re the masters at limited assortment. I haven’t seen anyone beat them on price.”
Low prices are not the only strengths for Aldi, say consumers and company executives who are quick to point out that the quality of the chain’s private label products are equal to or superior to nationally branded goods. Aldi has rolled out gourmet food items at prices that the chain’s average shopper can afford.
“We aren’t trying to have our products look like someone else’s,” said David Kapusansky, director of real estate for Aldi stores in Michigan. “We try to look like Aldi. We are confident people trust Aldi brands and customers don’t have to think it’s someone else’s to buy it. We are confident in our products.”
The German chain, which first came to the U.S. in 1976, currently operates 800 stores in the U.S. Its plans call for opening 40 new stores a year through 2010. Its parent company, Albrecht, also owns the Trader Joe’s chain.
Moderator’s Comment: In your mind, how formidable a retail competitor is Aldi and why? Who has the most to fear from Aldi competing in the same market?
– George Anderson – Moderator