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In Tough Times, Aldi Promises Cheap Thrills

Shoppers turn to Aldi for cheaper groceries as recession looms

By Amelia Atlas, Newser User

Posted Nov 7, 2008 1:28 PM CST

(Newser) – It may not stock Coke or tempt shoppers with fancy end-aisle displays, but bare-bones grocery chain Aldi fits these tough economics, reports Time. With Americans downgrading to cheaper stores, Aldi's generic, spartan approach is attracting customers eager to save a buck, or more, on a gallon of milk. The chain cuts costs by offering staples—ketchup, cereal, olive oil—in one brand in one size.

Aldi's well-tested European business model undercuts its competitors by up to 90%, eliminating frills like free plastic bags and payment by credit card while keeping in-store staff to a five-employee maximum. Targeting urban neighborhoods where real-estate costs favor Aldi's minimal spatial needs—no butcher here—the chain plans to expand by 100 stores over the next two years.

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As food prices continue to rise, Aldi grocery stores are luring customers away from more expensive chains. (PRNewsFoto)

Donna McMorrow of Abbington, Mass., shops at a Shaw's supermarket in Braintree, Mass., Tuesday morning, May 27, 2008. "I'm trying to cut back," says McMorrow on dealing with rising food prices. (AP Photo/Stephan Savoia)

Aldi requires a 25¢ deposit on shopping carts, saving its staff the chore of corralling unreturned carts%u2014and thereby pinching pennies further. (AP Photo)

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They have an extreme value proposition, which is appealing at a time like this. - Bill Bishop, retail consultant,
on Aldi's appeal

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In Tough Times, Aldi Promises Cheap Thrills