I love Aldi. Is that so wrong?

Last updated on: August 31, 2013 at 2:45 pm by Jane the Actuary

I love Aldi. Is that so wrong? 2013-08-31T14:45:00-06:00 Jane the Actuary

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So I was surfing around and came across this: Do you know who owns Trader Joe’s? in the Freakonomics blog. The author was shocked, just shocked to learn that Trader Joe’s was owned by Aldi, because Trader Joe’s is the best store in the universe, well worth driving 20 miles for (as attested to by commenters) and Aldi is, well, Aldi.

To be sure, there are a few things Aldi doesn’t do well: most notably chocolate bars have historically been lousy, although the dark chocolate was just fine the other day, and milk chocolate in smores garnered no complaints. Produce can also be iffy and requires some scrutiny before purchase. And you can’t expect to get all your groceries there, depending on your meal plan and list for the week. If you’re an organic-only buyer, the selection is also slim.

But here’s what Aldi does well:

Their food is cheap, due to a lot of efficiencies in how they sell: limited selection, private label, simplified stocking (box-on-a-shelf), self-bagging, the cart-deposit system, bar codes all over the product so check-out is lightning fast. (They used to be cash-only, until the advent of debit cards.)

In general, they don’t sacrifice quality for price. The produce isn’t great, but my local Aldi, at least, is located next to a small grocery that specializes in meat and produce (Valli Produce), and I often combine a trip to both stores, so that’s not an issue. Most of their private label food is perfectly up-to-snuff, and they have some name-brand items, mostly for items where they don’t consider the private-label option to be good enough or consumers really want the brand (e.g., they recently started stocking Coke and Charmin, and have carried Colgate toothpaste for a while). They also have a mix of basic and “upscale” items in a given section.

They source internationally, so they’ll feature Italian imports during Italian week, and German imports (Nuernburger sausages, schnitzel, etc.) during German week.

They periodically have some really good special purchases. I got my French fry baking pan there (made in Germany), and my kitchen scale, and my car jump-starter (which worked, when I ran down the battery and unexpectedly put it to the test).

They pay their people well (the help-wanted poster they periodically have up shows a starting wage of $12.85 plus benefits) and even treat them well (Ann Althouse might beg to differ, but I expect their employees appreciate the swivel stool so they’re not on their feet all day), made possible in part by the low staffing their stores require, and an expectation, it seems to me, that their employees take more initiative, stocking when it’s quiet.

Fun fact: Aldi is global. Wikipedia will tell you all about the two Albrecht brothers who started the chain, had a dispute and split up the globe between them. Germany, too, is split, between Aldi North and Aldi South. But the products are generally not the same (they had an American week during our stay in Germany, but didn’t have any of the things that I missed from the US, except maybe donuts, or was it bagels?).

In the US, Aldi stands alone — it has no competitors who follow the same business model. But in Germany, there are lots of Aldis — Lidl, Plus, Penny Markt, and others, all of which feature primarily private labels, limited selection, small sized-stores, and special purchases (and the special purchases are a bigger part of the store and are bigger-ticket and of greater variety than in the US). They vary in the extent to which they offer fresh meat and fresh milk (as opposed to the UHT “shelf milk”). But some Aldi-specific things in the US are standard in German supermarkets (and I suspect elsewhere in Europe): the quarter deposit, the seated cashier, the bag-your-own (in fact, Aldi was a bit classier, in offering a packing counter rather than requiring that you frantically try to bag as the cashier scans, or bag while standing at your car in the parking lot).

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