What’s An Aldi?

Sorry, Guys–

My server got a surprise upgrade this afternoon, before I had a chance to back up yesterday’s post about Aldi. Here’s the closest rewrite I’ve been able to create. Sheesh! I already KNOW about the importance of BACKUPS!!! Guess I needed to stretch my memory for some reason– So here we go again—

A couple of years ago, I read an interesting print article (I believe it was in either Fortune or Money Magazine) about a German grocery retailer called Aldi that would be opening stores in Texas (and many other US states). The article cited the fact that one of their major claims to fame was their success in drumming Walmart out of Germany. Intriguing.

It was also mentioned in this article that part of Aldi’s expansion strategy in the US was to locate their stores within 1/2 mile of an existing Walmart Supercenter. Intelligent and inexpensive market research, I thought. I also thought how appropriate that was, given the fact that Walmart founder, Sam Walton, used the very same tactic in Walmart’s early days. He located his stores within sight of each small town’s Ben Franklin (a discount store).

Unfortunately, I couldn’t find the original article I read posted anywhere online, but here are some links to an interesting piece I did find online in Business Week (2004) and another summary from Time (2008).

Fastforward to March 2010. Luckily for me, TWO Aldi stores opened within about 3 miles of my home here in Fort Worth. I first visited the Aldi on Hulen in early April, and Aldi has had 100% of my grocery business ever since. I have been absolutely stunned by: 1. Their INCREDIBLY low prices and 2. The high quality of their food.

I’m most decidedly head-over-heels in love with this store!

Why? Because I love to eat, I love to cook, and I absolutely, positively love to save money! I guess it could be related to being of German/Irish extraction, but I’m a died-in-the-wool pragmatist. My “electric green” diesel VW Beetle TDI, while sporting a sunroof and heated seats, gets 50 miles to the gallon. : ) Aldi is a perfect fit for me–offering great food at an even better price.

Prior to finding Aldi, I did my grocery shopping at a wide variety of stores: Albertson’s, Kroger, Central Market, Target, and Braum’s. Walmart is also close by, but it’s an insupportable nightmare to checkout (15+ minute waits), its employees are invariably exhausted, and I was SO very disappointed by Walmart’s sponsorship of The Glenn Beck Show, that I just have to ask how did such a good idea go so far afield?

So, getting back to Aldi: When’s the last time you bought a large, smooth, creamy, undeniably delicious European chocolate bar for $1.29? [And I must say: they do offer a stunning variety of chocolate bars; even Venezuelan, which I have yet to try (but I'm working on it)].

I’ve tried a wide selection of their food, and I’ve not been disappointed in anything I’ve bought. I’m especially impressed with the quality of their smoked bratwurst, frozen apple strudel, and the freshness of their produce and bread. I’ve tried their glazed almonds, glazed pecans, roasted almonds, protein bars, chocolate (awesome!), green peppers, tomatoes, potatoes, onions, cheese, pork chops, peppered bacon, eggs, chips, frozen chicken pot pies, snacks, yogurt, frozen blueberries, dog treats, shampoo, paper towels, and much more. I’ve been pleased with everything; not a problem in sight.

Here’s a brief summary of some prices at my local Aldi, just to give you an idea of the level of savings I’m raving about:

Eggs: Average at other stores: $2.29/dozen Aldi: 88 cents
Green Peppers: local stores: $1.79 EACH Aldi: 4 pack for $1.99
Rotel (if you’re not from the West, you may not be familiar with this staple for Mexican food cooking–it’s a canned combination of tomatoes and green chiles) Other stores: 99 cents, Aldi 55 cents per can
Tortilla Chips: local stores: $3.59 Aldi: 99 cents
Potato Chips: local stores: $3.29 Aldi: $1.29
Fresh Pineapple: local stores: $3.99+ each; Aldi: 99 cents
Fresh Tomatoes: local stores: 4 for $4.29 Aldi: 4 for $1.69

And the prices are that good on everything I’ve bought, so far. From what I’ve seen, they don’t operate like other stores, using loss leaders. They simply offer low, low prices on everything. So, how does Aldi do it? By cutting overhead to the BONE. There are no shelves, bag boys, basket boys, returned check fees, or credit card transaction fees for you, the customer, to subsidize (more about this later in this post).

Their stores are small by Texas standards; to me, this is actually a plus. I can easily run into an Aldi to pick up three items and spend just 5 minutes from start to checkout. Time savings is just as important to me as saving money, and I REALLY like the efficiency of my local Aldi. Not only are the stores physically small, but Aldi offers its own store brand of all food items. If you want ketchup, there’s one kind. Mustard is offered in plain, honey mustard, and spicy brown varieties. Ditto on coffee, tea, and other staples. No more agonizing over which one of 15 varieties of ketchup to choose. I don’t know about you, but I’m a busy person. I prefer to spend my time cooking and eating my food, not spending an hour and a half CHOOSING my food.

{Just a brief aside: I recently read Sheena Iyengar’s book The Art of Choosing
and learned the startling fact that for all practical purposes, 99+% of us can’t actually tell one brand from another in blind taste tests–we’re just emotionally attached to one brand over another thanks to successful marketing. VERY enlightening!}

Both local Aldi stores are well-organized and “product dense;” by the third trip, you’ll understand the layout of the store and will be able to find what you want quickly. Just load your basket, make your way to the checkout, and you’ll be amazed at how quickly the checker will complete your order. There’s no time wasted waiting for the checker to bag the groceries of the person ahead of you. Groceries are efficiently moved from the belt to the scanner to an empty basket. Then it’s your turn: you pay and receive your basketful of groceries, then simply move to the spacious bagging counter, where you can take your time and bag your groceries at your own pace. Gotta love that German efficiency!

I took a friend shopping with me last weekend, and she said that Aldi reminded her of a small scale Costco. (Interestingly, it appears that the same family that owns Aldi also developed and owns the popular Trader Joe’s. Perhaps that’s why the food’s so good).

In exchange for getting such incredibly low prices at Aldi, I agree:

1. To pay cash (or use a debit card). No credit cards or checks are accepted.

2. To bag my own groceries. I have no problem with this, either, and happily do so with my Chico bags. If you don’t have your own bags, you can buy them for something like 6 to 10 cents each. [Again, you, the customer, aren't subsidizing the costs of providing "free" bags for 10,000 customers. Another big plus, in my opinion. Also helps encourage the use of reusable bags, helping reduce the size of our landfills. I'm all for that!]

3. Park my own shopping cart. This system works just like the baggage carts at the airport (do they even have those anymore??). By inserting a quarter into a locking device on the cart’s handle, I’m able to unlock a cart to shop, then return it to the stack of carts, just re-inserting the locking device to get my quarter back. Personally, I like the bonus that grocery carts aren’t strewn about the parking lot.

It’s been my experience that their employees are both friendly and efficient. I’ve enjoyed every one of the eight or so trips I’ve made so far. I’m also realistically anticipating saving an astounding 35-40% on my grocery bill (perhaps even more; time will tell–I’ll know by the end of the year). All this while still enjoying high quality foods. Now THAT impresses me!

I don’t know about you, but it’s also a terrific bonus to me to completely forego the common grocery store experience. We’ve all been there. You’re invariably in a hurry while you stand in line for what seems like an absolute eternity while someone in front of you, miraculously realizing the need to actually PAY for their groceries (importantly, this realization hitting home only AFTER the checker has taken 10 minutes or so to scan and bag them all), takes another 5 precious minutes out of your busy day to fumble through her purse just to start the process of finding her checkbook. If you’ve accumulated some particularly bad karma, her check will be rejected and the manager will be called. Rest assured, this will NEVER happen to you at an Aldi store.

If you’re lucky enough to live near an Aldi (here’s a link to their Store Locator), you really owe it to yourself to check them out! And, yes, FYI, it looks like the original article I read a few years ago was spot-on: each of my local stores is indeed located within sight of a Walmart Behemoth.

Here’s a link to some of their commercials, so you can get a visual feel of their store layouts.

Happy shopping!

Update 3/30/11: The New York Times has an interesting profile of Aldi’s business model; click here.