Grocery shopping for a household can be a daunting prospect, especially if you have a lot of mouths to feed every day. Getting the best deal on groceries is an absolute must for many families.
Grocery chain Aldi has become the go-to for many budget-friendly shoppers, and it’s not difficult to see why.
Let’s explore 17 reasons why Aldi is so cheap and able to pass on so many savings to their customers – some of these are going to surprise you!
17 Reasons Why Aldi Is So Cheap
1. The Store’s History
Aldi founders Karl and Theo Albrecht inherited a grocery store space from their mother in 1945. Germany was not a prosperous place to be post-World War II, so the brothers adopted a model of just-the-basics sold at the lowest possible price points.
From the very beginning, the mission of Aldi stores has been to provide customers with the essentials at prices anyone can afford, and in this, they have never wavered, while succeeding admirably.
It’s even built right into the store name: “Al” comes from Albrecht and “Di” comes from the word “discount.”
2. No Fancy Displays
Upon entering your typical supermarket, you might see an enormous display made of soda cubes.
While aesthetic to look at, such a thing would never occur at Aldi, because for them, time is money. Stores are not going to pay someone to be building a display; they’re going to pay them to be providing actual customer service in the form of check-out or stocking.
Aldi even takes it to the next level. Their stock goes up on shelves right in the packaging they arrived in from the truck, with the newest boxes going in the back or the freshest produce placed beneath the older.
3. Private Label Brands
When wandering the (limited) aisles of Aldi, you might notice a distinct lack of brand names. Everything looks familiar, but upon closer inspection, there are no Cheerios, no Land O’ Lakes, and no Hillshire Farms.
That’s because one of the ways Aldi keeps prices so low is by selling almost entirely their own private-label products. Instead of name brands, you’ll see Fit N’ Active, Nature’s Nectar, Never Any!, and Bremer.
While these off-brand names might mean less money from your wallet, they in no way mean less quality.
In fact, items like their Happy Farms milk come from the exact same dairy and processing plant as some of the big-label milk you would see in your Kroger or Wegmans.
4. Smaller Stores
It’s not your imagination that Aldi stores feel smaller and less warehouse-y. They are an estimated six times smaller than your typical Walmart, and every less square foot of space is less room that has to be cleaned, heated, or cooled.
It’s also less space to be structurally damaged or require fixing, maintenance, and monitoring for damage.
5. Less Warehouse Space
Along with their smaller stores comes less storage in the back. While this might not seem like a boon, it benefits the customer in two ways.
Firstly, it contributes to the overall smaller stores (and therefore lower prices) and it ensures the freshest product is always being moved out onto the sales floor. It’s really a twofer!
6. Limited Stock
Inherent with less storage and shelf space is fewer items. Aldi makes excellent use of the space they do have, though.
Pretty much any fridge or pantry staple you require will be there for a great price, but you’re not going to find 20 different varieties of salad mixes or 15 cold brew brands.
You also won’t find a steady stock of things like office supplies, birthday cards, clothing or furniture. The stores may get them from time to time as ALDI Finds (special weekly items sold in limited quantities), but you have no guarantee they will be there.
Not constantly stocking superstore-esque products certainly allows Aldi to function with their smaller spaces.
7. Cart Deposits
The Aldi quarter is so ubiquitous that stores sell cute “quarter keeper” keychains, but this method of “cart rental” serves dual purposes, both of which enable lower prices on the shelves.
First, it helps ensure customers return their own carts to the corrals at the front of the store.
This, in turn, means that Aldi doesn’t have to pay extra employees to monitor the carts in the parking lot, constantly corralling them and bringing them back.
8. Bring Your Own Bag Policy
BYOB means Bring Your Own Bag at Aldi. It’s not that Aldi doesn’t have bags at the registers; they do, but you have to pay for them, and it’s a way for the stores to bring in a little extra coinage while capitalizing on their express check-out model.
By setting up their check-out model so that cashiers aren’t the default baggers, they increase the overall efficiency of the shopping experience.
Faster check-out equals more potential people served, and this is especially important considering the next item on this list.
9. Limited hours
Walking into a Walmart at 1 a.m. is its own special thrill, but you won’t get that experience at Aldi. Stores run on much more limited hours than many of their grocery store peers. (This is why maximizing customers served during the hours they are open is so important!)
But these limited hours mean lower utilities, less wear-and-tear on stores, and fewer employees needed (and need to be paid).
10. Limited Staff
Why are there so few employees in Aldi stores? By eliminating many “frills” services and streamlining all their store processes, a typical Aldi building just does not need that many people working at one time.
Fewer employees mean fewer salaries or weekly wages.
11. Well-Paid Employees
But don’t confuse fewer wages with lesser wages. Aldi pays well above minimum wage in the United States, even to start, and their benefits package is considered generous.
While this might seem counterintuitive to the consumer getting lower prices, it means that high-performing employees have the incentive to stick around, and the longer they stay, the better and more efficient they get at their jobs, helping operational costs stay stable.
12. Well-Trained Employees
Speaking of people good at their jobs, while Aldi stores have a reputation for sometimes back-breaking work, no one can accuse their employees of not being well-trained.
Whereas in a big box chain, you might have a team of five manning the carts, while a dedicated team of three works in refrigeration, Aldi employees are cross-trained in every area.
This is another practice that helps stores limit the number of employees.
13. Barcodes everywhere
Because Aldi’s stock is 90 percent private label, they can control the packaging, and they have certainly done so. Check out a 12-pack of their store-brand soda cans and you will find no fewer than seven barcodes.
All these barcodes speed up the check-out process (cashiers don’t have to waste time finding the one hidden barcode) and contribute to overall efficiency.
14. Sitting cashiers
And yet another contributing factor to the stores’ overall efficiency is their sitting cashiers.
Not only does this keep them from getting tired (read: slower) faster, Aldi claims it helps them scan faster, too.
15. No Superfluous Services
Also pared down in Aldi stores are the types of services they offer. For example, you cannot buy stamps in Aldi locations, or cash checks (they don’t even take checks), or print money orders.
In fact, you can’t even call individual stores for the most part. Many choose to leave their numbers unlisted, so that employees aren’t tied up, answering the phone all day. So no call to reserve items or to complain.
16. Limited advertising
There is a list of items as high as Mt. Everest that would happen before Aldi spent the money for a Super Bowl ad.
In fact, they barely spend anything at all on advertising. In 2016 they spent 42 million dollars on ads; in comparison, Walmart spent 2.75 billion in 2019.
Instead of big media buys, Aldi has social media presence on Instagram, Facebook, and Twitter, and their word-of-mouth advertising is extensive, with entire articles, blogs, and posts devoted to the chain.
17. No store music
Some grocery stores have all the good bops playing, but not Aldi. The spartan shopping experience is capped off by a lack of music in the store.
If you would like to learn how other stores keep their prices so low, don’t forget to see our other posts on:
Conclusion
Aldi’s presence in the United States is growing every year, and it’s no wonder customers are willing to be persuaded by the grocery store’s business model. With customers’ savings at the heart of everything they do, Aldi ensures exceptional value with their cost-cutting practices.
