Bigger Isn’t Better: Why Aldi’s Business Model Leads to Happy Customers and Rapid Expansion
Sometimes, less is more. Truer words were never spoken, and it’s good to know that there’s at least one major company out there that keeps these words close to heart—the Albrecht Discount grocery chain.
If you haven’t had the experience of shopping at Aldi, don’t worry, because it’s very likely that you will soon. “Within the last few years, [the company] has accelerated its expansion by adding more than 250 stores, with plans for 80 more [openings] both in 2011 and 2012,” according to a New York Times article. They first came to the U.S. in the late 70s, and have since built up quite a following among budget-shoppers, myself included.
As anyone who’s frequented their stores will tell you, their inventory is rather sparse. Aldi stocks their shelves with a total of about 1,500 items—significantly less than the tens of thousands of items that larger grocery chains and superstores tend to have on hand any day of the week. But of course, a wider selection is not what Aldi is about. What the discount grocery outlet lacks in variety it makes up for in low prices—very low prices.
Their success is due in large part to the extreme low cost of their privately owned, off-brand items, which is all that they offer. For example, you won’t find Cheerios at your local Aldi, but you’ll have no trouble finding Crispy Oats (their exclusive knockoff), at a far better value, no less.
I’ll be honest—I’m oftentimes not a very thrifty shopper. I tend to need all the help I can get when it comes to saving money, especially with groceries. I’ve been an Aldi shopper for the past couple of years and can vouch for the fact that they’re a godsend. They’re not the only chain that I shop at, but I honestly don’t know where I’d be without them—probably just broke and hungry.
Sure, the selection at Aldi is somewhat lacking compared to superstores like Wal-Mart and Target, and I don’t always like to settle for a grocery item that’s not exactly what I’m in the mood for, but at the end of the day, I know that I’m saving a boatload—and I know that others, like me, are probably saving as well. Sometimes, that’s just what matters most.
The company’s “business model—cost control, low prices, and limited selection of quality products—has definitely translated into success in every country Aldi enters. It’s a format that appeals to budget-minded shoppers, as well as those on a low- or fixed-income,” according to BrandChannel. It’s an approach that’s equal parts considerate and savvy, and it’s obviously rewarded them. Their streamlined inventory expedites the average shopper’s grocery run considerably, ultimately leaving the consumer with extra time and cash to spare by the end of a visit.
Aldi may not have much compared to bigger supermarkets, but what they do have is unbelievably affordable. Can you really fault them for that? I didn’t think so. Again, less is more, and businesses who depend on cash-strapped consumers could learn from such a philosophy.
What are your thoughts on this discount store chain? Do you think they’ll continue to give larger chains a run for their money? Would you sacrifice name brands to save money?