New Grocery Chain on the Block Offers an Alternative to the Walmarts of the World

Nathaniel Meyersohn reports on Aldi, "the no-frills German discount grocery chain that’s growing aggressively in the United States and reshaping the industry along the way."

According to Meyersohn, the secret to Aldi's success is an extreme focus on efficiency. The effect is immediately noticeable.

New customers may be jolted at first by the experience of shopping at an Aldi, which expects its customers to endure a number of minor inconveniences not typical at other American grocery stores. Shoppers need a quarter to rent a shopping cart. Plastic and paper bags are available only for a fee. And at checkout, cashiers hurry shoppers away, expecting them to bag their own groceries in a separate location away from the cash register.

But Aldi has built a cult-like following. When it enters a new town, it’s not uncommon for hundreds of people to turn out for the grand opening. The allure is all in the rock-bottom prices, which are so cheap that Aldi often beats Walmart at its own low-price game.

The company already has 1,800 stores in 35 states and has plans for growth in the Midwest, the Mid-Atlantic, Florida, and California, explains Meyersohn. Growth is happening so quickly, Aldi will soon be the nation's third largest supermarket chain.

The article includes coverage of the tactics that help the company keep real estate costs down: "Size is one factor. A Walmart supercenter averages around 178,000 square feet. Costco warehouses average around 145,000 square feet. Aldi’s small box stores, however, take up just a fraction of that space, at 12,000 square feet on average."