Aldi

[barrettd]

As of this morning, the south building is completely gone. Wish a Crest was going in there instead of an ALdi.

I hear you, but, if you haven't already, give Aldi a chance. I was a non-believer until I actually went once or twice. It's a quality store for what it is. Certainly not the same as Crest, but a good option for that area. Sprouts is always just up May.

[Pete]

Aldi has grown on me as well. It takes a while to figure out and find the items that you really like... And almost everything is a very good value.

This new location will be very near me and the only reason I don't shop at Aldi now is because the closest store is at 23rd & MacArthur which is way too far and too much trouble to make the trip worthwhile.

Aldi stores seem to go up fast... Wouldn't be surprised if it opens around the same time as the new Winco at 39th and Portland.

[barrettd]

Aldi stores seem to go up fast... Wouldn't be surprised if it opens around the same time as the new Winco at 39th and Portland.

Can you remind us of that timeline?

They also remodeled the Penn/Memorial Aldi pretty darn quickly, and it's a lot nicer after the remodel.

[John1744]

I work in the grocery industry and we had a presentation on Aldi's and Lidle the other day. Both companies are just brutally efficient. They control margins to a precise degree to maximize revenue. And Aldi's is terrified of Lidl. The presenter said that Lidl coming in fast will push Aldi's harder and harder to offer better deals and better stores.

[Pete]

How Grocery Giant Aldi Plans to Conquer America: Limit Choice
Secretive giant offers shoppers bare-bones stores and rock-bottom prices—a formula that will further unsettle a fast-changing industry
Sept. 21, 2017 10:29 a.m. ET

MÜLHEIM AN DER RUHR, Germany—Dim lighting bounces off brownish-tiled floors. The shelves are sparsely filled with cardboard boxes. Checkout lines stretch to oblivion.

There is nothing super about these stores.

Yet their owner, German discounter Aldi, is betting billions it can win over spoiled American shoppers. How? By offering them fewer choices—way fewer—than rival retailers.

The unlikely proposition has worked nearly everywhere Aldi has set foot. The company that started from a simple suburban grocery store in Germany’s industrial northwest is now one of the biggest retail groups in the world with more than 10,000 locations, businesses in 18 countries and annual revenues approaching €70 billion, or $83 billion.

This summer, Aldi opened a new chapter in this seemingly unstoppable expansion, announcing a $3.4 billion investment to boost its U.S. presence by nearly 50% to 2,500 stores by the end of 2022. This puts the company on a pace to become America’s third-biggest grocery retailer by locations behind Wal-Mart Stores Inc. and Kroger Co. The land grab closely followed its decision to invest $1.6 billion in renovating the bulk of its existing 1,700-plus U.S. stores, some of which have been around since the 1970s.

Growing Empire

Expanding across Germany and beyond gave Aldi Süd and Aldi Nord massive purchasing power, allowing them to negotiate some of the lowest prices in the grocery industry with suppliers.

The American grocery market, one of the largest and most competitive in the world, is on the cusp of dramatic change since Amazon.com Inc. acquired Whole Foods Market Inc. this summer and Google struck a partnership with Wal-Mart. But the Germans have a plan, forged in the rubble of World War II.

The strategy “is simple,” said Aldi spokesman Florian Scholbeck, sitting in the darkened break room of a prototype store in the company’s home state. “But it’s not easy.”

Even in Germany, not much is known about how Aldi operates. It does little media advertising, doesn’t publish financial statements, and its top executives don’t give interviews.

The Wall Street Journal figured out Aldi’s idiosyncratic playbook through internal documents, the company’s rare public filings, and interviews with past and present managers.

It offers a deliberately pared-down selection, sometimes a tiny fraction of the number of items sold by rivals, which helps Aldi cut costs to levels U.S. grocers can only dream of. Among other benefits, fewer items means faster turnover, smaller stores, less rent, lower energy costs and fewer staff to stock the shelves. That parsimony enabled Aldi to establish itself in Europe and then launch into the U.S.

About 70 years ago, brothers Karl and Theo Albrecht, fresh from military service in World War II, took over their family’s store in Schonnebeck, a mining neighborhood of the bombed-out industrial city of Essen. In the early 1950s, they began rolling out their ascetic concept to other branches throughout the region.

Back then, their stores offered just 250 items, the essentials miners’ and steelworkers’ families needed to survive—flour, sugar, coffee, butter, bacon, peas and condensed milk.

In the 1950s and ’60s, Germany’s economic miracle took off, and a wave of glitzy supermarkets selling thousands of items sprouted up to serve the newly affluent middle class. Aldi didn’t flinch.

In his only known public remarks on Aldi’s business model, Karl Albrecht said in a 1952 speech that the brothers had once toyed with the idea of following the supermarket trend.

In the end, they decided to keep their limited selection after realizing it gave them an edge: “We had much lower expenses,” Mr. Albrecht said.

By keeping costs low, the Spartan assortment allowed the founders to sell their inventory for less and turn it over at lightning speed, boosting profit margins, according to former executives.

“Speed wins, speed kills,” said Craig Johnson, president of the Connecticut-based retail consultancy Customer Growth Partners.

In 1961, the brothers divided their growing empire into two kingdoms, Aldi Nord and Aldi Süd (the shared name came from a contraction of the words “Albrecht” and “discount”). They organized each part as a Gleichordnungskonzern, a legal structure under which a fleet of legally independent companies swear loyalty to each other while reporting to a central board.

The arcane structure had one crucial advantage: It meant the group never triggered financial reporting requirements imposed on other businesses of its size. German companies must publish earnings reports if they check two out of three boxes: more than €65 million in assets, over €130 million in annual sales, or more than 5,000 employees.

Broken up into small parts, Aldi’s armada of companies didn’t cross these thresholds. Under their cloak of secrecy, the brothers could hide their colossal and rapidly rising sales volume from competitors.

After the split, the twin dynasties continued to keep their selection in check, pool market intelligence and avoid direct competition.

Aldi Süd
Sources: Ahold Delhaize; Customer Growth Partners.
By then, Aldi Süd was selling 400 items per store in its Southern German fief, its inventories arranged on wooden pallets on the floor. In the north, Aldi Nord’s markets were selling about 450. Today, the brothers are deceased and power lies with the empire’s collective leadership. But Aldi has stayed true to the concept. Most Aldi stores stock between 1,300 and 1,600 items, depending on the country.

By comparison, Wal-Mart’s Supercenters have in recent years carried around 120,000 items. Average supermarkets in the countries where Aldi operates now carry between 20,000 and 50,000 items, experts say.

Aldi has always been focused on “making everything as simple, as standardized and as streamlined as possible,” said Matthias Queck, an Aldi expert at the German grocery consultancy LZ Retailytics.

Crucially, Aldi limits its stock of brand-name items, so it is often easier to negotiate low prices from its suppliers. Even Wal-Mart, famous for extracting concessions from its suppliers, can sometimes only go so far because premium consumer-goods companies have to bear costs such as advertising.

On a basket of 30 typical household items, Aldi’s prices are on average almost 17% lower than Wal-Mart’s, according to research conducted by Mr. Johnson of Customer Growth Partners.

“It’s a system of 1,000 details all made against the backdrop of costs,” said Dieter Brandes, who sat on Aldi Nord’s board of directors with Theo Albrecht until 1985. “Nobody needs 50 different types of toilet paper,” he said.

With its limited assortment, Aldi’s biggest problem, according to Eberhard Fedtke, who managed Aldi Nord stores in the flagship region in Essen in the 1970s, was “where to get enough stock, and where to put all the cash we were making.”

His region of around 40 Aldi stores rang up sales of about 1.2 million deutsche marks, or roughly $485,000 at the time, every day. His stores sold out of goods so quickly, in about eight days, that he would order inventory twice in the time it took suppliers to bill him once.

While becoming the first to scale the hard-discount model in Germany, Theo Albrecht of Aldi Nord found a kindred spirit in the U.S., buying the California-based franchise Trader Joe’s in 1979 from its founder, Joe Coulombe.

Trader Joe’s had concocted a similar model based on limited selection, keeping inventory back then to 1,100 items. In Mr. Albrecht’s obituary, the only comments from the family on the acquisition, Trader Joe’s is described as a “premium discounter.”

Other American brands also developed a concept based on curbing selection, including Costco Wholesale Corp. , which these days limits its stock in U.S. stores to 3,800 items to boost turnover speed.

Aldi is gambling it is more in tune with the American tastes, rolling out small, nimble stores instead of sprawling warehouses and supermarkets that take longer to navigate.

The expansion of the German hard-discount model in the U.S. “comes at a time when shoppers are, more than ever, seeing the appeal in a small format, quick-trip-type store that offers low prices and high quality,” said Mike Paglia, director of retail insights at the Kantar Retail consultancy in America.

“The typical 40,000 square-foot supermarket is a dinosaur, and it’s extinct,” said Phil Lempert, an American grocery retail expert. “Those stores need to die.”

An Aldi store in Greenville, N.C., this summer featured a private brand of diet soda in boxes of 12 for $2.25 and a cup of Greek yogurt for 69 cents. In the parking lot, Latonya Edwards, 44, a nurse, said she comes to Aldi to stock up on staples for her pantry such as canned goods, a signature of the brand since the Albrecht brothers entered business after the war. “You have to know how to shop,” said Ms. Edwards, who was pushing a full cart toward her car.

Theo Albrecht of Aldi Nord approached cutting waste at the company with religious fervor, according to Mr. Fedtke, who attended Catholic church with the brothers at St. Markus in Essen-Bredeney, a neighborhood of industrialist estates.

The younger Mr. Albrecht asked employees to turn the lights off when the sun was out, took notes on scrap paper and asked store managers to set bathroom hand dryers not to blow for one second too long.

Former executives say he saw every cent of waste in a single store as an existential threat that, if multiplied across his growing empire, could put his fortune at risk.

Growing Competition

Aldi's increased focus on the U.S. comes amid upheaval in the supermarket landscape. PHOTOS: BLOOMBERG NEWS(3)
One of Aldi’s strengths that has eluded many discounters is its ability to draw middle-class shoppers—those with more money to spend—despite its limited array of goods. It did this by cultivating the image of a company focused on quality rather than pinching pennies.

“Poor people need us, rich people love us,” Theo Albrecht used to tell executives, according to Mr. Brandes, the former board member.

There too, executives say, the limited assortment played a central role. The small number of items ensured that staff could carefully choose, taste-test and quality-control each item.

The ground floor of Aldi Süd’s headquarters in Mülheim has a test kitchen where every day from 8:30 a.m. to 2:30 p.m. the company’s executives and buyers constantly sample food sold in its stores and conduct blind tastings to see if it beats the competition. One test involves sampling spoonfuls of olive oil.

Mr. Scholbeck, who became Aldi Nord’s first ever communication director this year, said a €4.99 bottle of Spanish Grenache red wine recently on sale in the company’s German stores scored 93 out of 100 points on the American wine expert Robert Parker’s rating system, making it an “outstanding wine of exceptional complexity.”

“You should see what kind of cars were out there!” he said. “The Porsche drivers were buying 6-packs. Because the quality is on point.”

After the introduction of the euro fueled rising prices, the discounter asserted itself as a mainstay in the vast majority of German households, according to analysts.

A Forsa Institute poll in 2002 found that 95% of blue-collar workers and 88% of white-collar workers in Germany shopped at Aldi.

“Aldi is like a lighthouse,” said Michael Lohse, spokesman for Germany’s Farmer’s Association. If its prices move, other retailers “have to follow them.”

[tfvc.org]

The biggest challenge I have found in shopping at Aldi is it isn't great for quick trips. They usually only have 1 maybe 2 people checking people out and the last time I was there it was one and line went about a quarter into the shopping isle. I only needed one thing so I ended up leaving and going somewhere else. On the other hand their prices for roma tomatoes is outstanding. 7 tomatoes for a dollar so that is where I have been going for them and other fruit.

[Pete]

The biggest challenge I have found in shopping at Aldi is it isn't great for quick trips. They usually only have 1 maybe 2 people checking people out and the last time I was there it was one and line went about a quarter into the shopping isle. I only needed one thing so I ended up leaving and going somewhere else. On the other hand their prices for roma tomatoes is outstanding. 7 tomatoes for a dollar so that is where I have been going for them and other fruit.

I agree about the long waits at checkout.

It's only worth going in if you are planning to buy several things.

I wonder if they have considered self checkout?

[tfvc.org]

I agree about the long waits at checkout.

It's only worth going in if you are planning to buy several things.

I wonder if they have considered self checkout?

Although I am not a fan of self checkout especially for those huge box stores when they make it your only option I would love to see it for those with 10 or 20 items or less.

[scottk]

I will echo the long lines when shopping at peak times, however, due to the no-bagging at check-out and bar codes from every angle on most products, the lines actually move pretty quick. Additionally, the Aldi I visit will page a back up checker or two to help alleviate the rush of a long line.
The check-out lane conveyor belt is long on purpose. Lay out all your items flat and in a single file, largest boxes to small delicate items like bread and eggs last. This helps speed up the scanning process and transfer from belt to cart. Most items just "slide" across the bar code scanner straight to the cart. Also, the switching of the carts at check-out ensures a smooth transition between transactions.

As for the limited number of check-outs open, I think it is all in an effort to keep costs down. From the LED lighting, to one large unit air conditioner in the center of the store, these are all cost cutting measures. Most of the time the store has a total of 4-5 employees working. While one or two are up front checking out, the others are stocking the shelves or cleaning the store. When compared to the larger big box stores, there are easily 40-50 people working at a time. Aldi has made recent improvements in the point of sale by accepting credit cards and recently moved to Apple Pay/Tap-to-pay at my location to speed up the process.

Additionally, the renovations listed above at current stores are opening more space at the check-out and front of the store to help with the lines wrapping around the aisles. The Quail Springs Aldi at Penn and Memorial has a much more open feel at the front with the recent improvements.

[d-usa]

It also helps to side your card and pay as soon as they start scanning your stuff. Customers could cut the wait time down by a significant margin by doing the right things.

[oklip955]

One word of caution for folks shopping Aldi's the last day of sale, expect a lot of the items to be sold out including foods and fruit. I just went to town and found 3 out of 5 items sold out. The manager said they would get a new shipment in tomarrow but will not be sold at the sale price and no rain checks. Kinda of bad when its a bit of a drive to shop at the closest one.

[stile99]

I've noticed that while sales officially start on Wednesday, quite often the items are on shelves Tuesday. The website will show you the specials for the current week, as well as the specials for next week, and 9 times out of 10 if I'm there on a Tuesday (last day of the previous sale), most if not all of next week's items are available. I've found that the ones that AREN'T probably aren't going to be coming in on the next truck either, or maybe not even the next. That's one thing that frustrates me about Aldi, there seems to be a lack of communication in the warehouse as to what goes where when. Sometimes something that was advertised doesn't pop up until three weeks later (but does indeed sell for the price that was listed three weeks ago).

[scottk]

Edmond Aldi at Edmond Road and Kelly is nearing completion on the renovation/addition. The plywood wall is down by the registers and the additional floor space to the east, while currently empty, is open. Similar to the Quail Springs Aldi store on N. Penn, the check-out and entrance are much more open with more natural light coming in with larger windows. Most of the new signage, painting, and LED lighting looks to be completed. I would guess the renovation would be complete by the start of November. The new Aldi logo is also on the building which is a "sleeker" Aldi "A" and a darker gradient blue for the background.

[Brett]

The NW 23rd & MacArthur Blvd location is closed for remodeling.

[Pete]

Mayfair Aldi:

[Bullbear]

Mayfair Aldi:

I always love driving by and seeing dirt work happening. this can't open soon enough!.. especially with the 23rd ALdi closed for final part of remodel and the bridge at 23rd to get to that Aldi being closed as well!

[Pete]

Yeah, this is a biggee for me because I really like Aldi but there isn't one close enough, and this location will solve that issue.

As an added benefit, I can actually fly my drone over to this site directly from my backyard!

[Bullbear]

As an added benefit, I can actually fly my drone over to this site directly from my backyard!

Show off! that is awesome!

[Bullbear]

I got a grand Reopening mailer today for the ALDI on NW 23rd. November 9th.

[Pete]

Building permit application filed today for a substantial remodel of the NW Expressway & Rockwell location.

[bombermwc]

They dont seem in any hurry on expanding the stores like they had talked about either. Wondering if they are waiting to be closer to the booze inclusion date?

[oklip955]

They just finished up the remodel on the Edmond store. Looks nice. Grand reopening (never closed) was last Thursday. They gave out gift cards (vp from Chicago) in the amount of $10 - $100 to the first 200 shoppers. I got a $100 one. Me a real happy camper.

[Pete]

Steel is up.

[Lazio85]

I see my house and am excited about all the investment in this area!

[Pete]

Yes, I will definitely shop there quite a bit when it opens. The next closest location at NW 23rd and Meridian is just too far to make it worthwhile.