As Shoppers Seek Cheaper Groceries, One Chain Is Coming Out On Top

It’s been known for offering lower prices than most other supermarket chains for decades, but in the current era of inflation, Aldi has been capitalizing on its price-cutting status more than usual.

Savings by design

Prices at Aldi have been ticking up over the past few years just like other grocery stores. But the average cart of food is likely to be a lot more affordable there than at one of its rivals in the same community.

So how does it keep undercutting the competition? As Aldi exec Jason Hart explained, there are several key features of the chain that optimizes value for consumers while preserving profit for the company.

• The average Aldi is 20,000 square feet, which is less than half the size of a typical supermarket.
• Pallets are taken directly off of delivery trucks and placed onto the shelves to cut down on stocking time.
• Everything is designed to fit neatly into the aisles so every store maximizes its available space.
• With only about 2,000 separate items, the company can prioritize those that offer the biggest bargains.

Combined with the in-house brands for which Aldi has become famous, all of these small steps combine for serious savings. And judging by its rate of growth, the strategy is paying off.

An expanding footprint

Neighborhoods across the U.S. already have an Aldi, but that’s not slowing down the company’s acquisition of new properties far and wide.

Over the past 10 years, the company has added on average about 100 stores annually. That expansion has hit overdrive recently, though, and there are plans to sink about $9 billion into a plan that would open roughly 800 new locations in the U.S. by the end of 2028.

As Kroger CEO Rodney McMullen recently acknowledged: “They’re a tough competitor.”

Chris Agee April 30th, 2024

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