Maybe you’ve heard of a discount supermarket called Aldi? If you haven’t yet, you will soon.
This German-based grocery store is quietly taking over the supermarket industry with the intention of dominating the vertical. This is no small feat considering they’re up against formidable adversaries like Walmart and Costco. Still, Aldi has a very different tactic when it comes to attracting customers, and it has nothing to do with selling in bulk or rolling back prices.
Aldi offers some of the lowest prices in town even though they’re not the biggest chain ordering the highest volume. Here’s how they do it.
1. They don’t rely on brand name products
Aldi stocks unknown brands. | Sean Gallup/Getty Images
Visiting Aldi is a little bit like visiting a foreign country. Instead of Oreos, you get Benton’s sandwich cookies. Instead of Tostitos, you’ll want to grab a bag of Clancy’s tortilla chips for $1.29.
First-time shoppers are surprised to find that 90% of the merchandise in Aldi is private label. That’s the biggest reason everything is offered so cheaply. It’s a takes a little getting used to, but once you realize how much money you can save by skipping national brands, you come to truly appreciate Casa Mamita salsa in all its off-brand glory.
Next: You’ll never be overwhelmed by options.
2. They have a smaller selection
Aldi has fewer brands to choose from. | Megan Elliott/The Cheat Sheet
An Aldi supermarket stocks about 900 products compared to a traditional supermarket’s 50,000. Stocking fewer items is cheaper for so many reasons. First, the store size is much smaller. A smaller retail space means the rent and utilities are cheaper.
With fewer items to stock, employees can work shorter shifts. And while some people balk at the idea of only having one choice for mustard, it turns out that the psychology works out in their favor. People who have fewer choices report a greater level of happiness with what they chose than those faced with 350 different salad dressings.
Next: Here’s why you usually don’t see employees on the sales floor.
3. Stocking shelves takes less time
Shelves are stocked in the shipping boxes they came in. | Aldi US
Aldi shoppers are used to picking their grocery items directly out of the cardboard shipping box they came in. Items are stacked on shelves or on top of each other in a no-frills display that makes it easy to stock shelves.
Next: This part isn’t pretty.
4. The store isn’t pretty
It’s pretty ugly inside. | Megan Elliott/The Cheat Sheet
At Wegmans, you’ll find hand-painted signs advertising the boulangerie and artful displays of farmer’s market quality fruit. At Aldi, you’ll find concrete floors and a whole lot of minimalism.
True, it’s not a beautiful grocery shopping experience. But it is a cheap one.
Next: This is one of the most controversial aspects of Aldi.
5. They sell pre-packaged produce
Aldi sells prepackaged produce. | Megan Elliott/The Cheat Sheet
One of the biggest complaints about Aldi has to do with their produce. Rather than picking out the best apples and oranges from a display, customers select pre-bagged fruits and vegetable items. This helps reduce upkeep at the store, but the quality sometimes suffers. Sometimes you get what you pay for.
Next: This is how they’re modernizing stores.
6. There’s energy-efficient lighting
The store uses energy-saving lighting. | Scott Olson/Getty Images
Aldi stores are designed with efficiency in mind. Besides just minimalist displays, they use a floor plan that’s meant to maximize natural light along with recycled materials, energy-saving refrigeration, and LED lighting.
Next: This saves on labor costs.
7. There aren’t as many employees
There are fewer workers, but higher paychecks. | Scott Olson/Getty Images
Since it doesn’t take as long to stock shelves, you won’t notice as many people working at Aldi. Saving on labor costs allows the company to offer cheaper prices to consumers. Having fewer workers also means Aldi pays their people higher wages.
Next: This is the reason you need to remember your bags.
8. They don’t have bags
You have to pay for bags. | Alex Wong/Getty Images
Want to bag your groceries at Aldi? You’ll have to pay for it. The store doesn’t offer free bags, which encourages customers to bring their own. This also helps to keep Aldi environmentally friendly.
Next: You’re unlikely to see a commercial.
9. They don’t advertise
It don’t advertise on TV. | Daniel Leal-Olivas/AFP/Getty Images
Have you ever seen an Aldi ad on TV? Probably not. This discount store relies on word of mouth advertising, which is obviously working so far.
Next: There’s no midnight shopping available.
10. They have reduced hours
Aldi saves money on operation costs. | Matt Cardy/Getty Images
Sure, it’s convenient that you can run to your local grocery store at 3 AM. But you’re paying a premium for that privilege.
Aldi typically opens later and closes earlier than other grocery stores, which saves them money on operational costs. Those savings are then passed on to you.
Next: Don’t forget the quirky thing about shopping carts.
11. You rent your shopping cart
You have to rent your cart. | Megan Elliott/The Cheat Sheet
Experienced Aldi shoppers always remember to bring their quarters!
At Aldi, you “rent” your shopping cart for a quarter and only get it back when you return the cart. This incentivizes people to return their carts rather than leave them in the parking lot, negating the position of shopping cart wrangler.
Next: Brands can’t buy their way in.
12. They don’t charge for shelf space
Brands don’t have to pay for shelf space. | Megan Elliott/The Cheat Sheet
Most supermarkets charge for shelf space — that’s why you’ll only find big-name brands at eye level. Meanwhile, Aldi has simple terms and no supplier charges. According to Australian newspaper The New Daily, Aldi does this, “to suck the profitability out of the [supermarket] industry in favour of the consumer.”
Next: Aldi buyers get to purchase more.
13. They purchase a higher volume of items
Aldi buys in bulk. | Scott Olson/Getty Images
Being able to purchase in bulk means big discounts for the retailer. Since Aldi only orders one type of ketchup, they can order larger quantities with confidence that every person shopping for ketchup will choose that specific item. Meanwhile, traditional supermarkets purchase fewer quantities of more items to maintain their large selections.
Next: You can find brand names there, too.
14. Their brand name items are often overstock
The brand names are from overstock. | Megan Elliott/The Cheat Sheet
Even though most Aldi offerings are private label, you can often find name brand merchandise in their rotating selection of seasonal items. These discounted products might be experimental flavors (Peach Cheerios, anyone?) or other overstocks that Aldi purchased cheaply.
Next: They care about their customers.
15. They focus on customer satisfaction
Customers are the priorities. | Daniel Leal-Olivas/AFP/Getty Images
Aldi wants you to like them. They’ve figured out the simple truth about American shoppers — they’re not interested in fancy products or store amenities, they’re interested in saving money. And for that, Aldi is king.
Read more: 6 Things You Should Never Buy at Aldi (and 6 Best Foods You Definitely Should)
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