Most people have brand loyalty when it comes to their preferred grocery store. If you grew up in Southeast Pennsylvania like me, you always went to Acme (pronounced Ak-a-me). Or, if you are my grandmother, you go to Shop ‘n’ Bag because, “They have the best coupons.” However, in an age in which prices are going up everywhere while pay remains stagnant, sometimes you have to go where the prices are lowest. Never fear, because Aldi is here.
What is Aldi?
Aldi is an international supermarket chain that focuses on discount prices. Founded in 1946 by German brothers Theo and Karl Albrecht, the name Aldi is an abbreviation of “Albrecht Discount,” which hints at the brothers’ game plan when it came to grocery stores. Their early business model involved lower food prices that built in the rebate shoppers could get if they mailed in proof of purchase. That means, instead of the shopper paying the higher shelf price and getting the rebate later, the Albrecht Brothers simply eliminated that hassle.
Additionally, the brothers were ruthless when it came to stocking their shelves. Anything that wasn’t selling didn’t languish in the aisles. Instead, they just completely stopped selling the product. This type of efficiency lowered waste, which allowed the brothers to apply those savings to the customer. Big surprise: These policies made them massively popular in post-war Germany.
As the Aldi enterprise began to grow, the company split into Aldi Nord and Aldi Süd in 1966 and remain two separate entities to this day, each responsible for managing locations in their assigned regions and countries. Aldi is massively popular throughout Europe, but there are also stores in Australia, China, and the United States. All told, there are over twelve thousands stores worldwide.
Why is Aldi so cheap?
In addition to their continued practice of efficient product shelving, there are several other practices that help Aldi keep prices low. First, their stores are generally smaller than other grocery store chains. This allows them to keep their stock carefully curated, but also allows them to hire less staff. Think about how many people are working at your local grocery store when you go there; it’s probably dozens. Lower overhead translates to lower food costs. The other added benefit of this is that Aldi employees get paid quite a bit more than minimum wage since there are fewer of them.
Aldi’s food selection also doesn’t include many brand names, focusing on their own in-store brands. And, if there are brand names on the shelves, they are usually overstock from the manufacturer. All told, these are going to be cheaper than the brand names you find in other stores. Their produce is often pre-packaged and they also require distributors to provide the food in shelf-ready boxes, so they don’t have to spend so much time stocking shelves. It maybe doesn’t look as pretty as other grocery stores, but the price sure is beautiful.
Does Aldi own Trader Joe’s?
Trader Joe’s is owned by Aldi Nord, which purchased the Los Angeles-based grocery chain from founder Joe Coulombe in 1979. Comparing the shelves of an Aldi and Trader Joe’s, you see the similarities; both stores primarily sell their own brands. Interestingly, while Aldi Nord owns and operates the Trader Joe’s in North America, Aldi Süd owns the Aldi grocery stores in the same territory. Nothing like a little bit of brotherly competition to fuel the economy.
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