ALDI—Coming Soon to a Neighborhood Near You!

How did ALDI (yes, the German grocery chain) become the go-to destination for today’s consumer, and how did it become the third-largest grocery chain in America? Most commonly known for a low-cost, no-thrill retail experience with limited product assortment, ALDI is expecting to open nearly 2,600 new locations in the US by year’s end here in the US. This retail phenomenon is winning in today’s volatile economic environment, with customer trips to ALDI up by nearly 7% (that’s 4x compared to the competition!).  

Why ALDI?  

ALDI uses a smaller store format, typically 20,000 square feet (compared to a more traditional super market size of 100,000 square feet) while reducing its SKU footprint to the staples that consumers are seeking. With this smaller format, savings are passed onto customers at the point of purchase. Further driving consumption, each store utilizes “Aldi Finds,” featuring discounts on select goods that rotate continuously as a way to keep consumers on the hunt for more deals.  

Lastly, ALDI reliance on private label products helps them keep costs lower than the national average on select products. While this private label-heavy strategy is not suited for everyone, ALDI has turned these differentiators into strengths rather than setbacks, using efficiency and focus to create a clear value proposition for its customers. 

Key Takeaways  

First, the traditional method of stocking something for everybody comes with a price, and that price isn’t always satisfying to the increasingly savvy consumers seeking savings among a shrinking household budget. With locations in many US suburbs, ALDI is able to capture this demand and the consumers driving it. Given the successes with convenience stores, it’s clear consumers are shifting their buying habits.  

Second, understanding your consumers’ purchasing decisions is key to capturing  demand, if only to review and determine that a change is needed. For retailers, ask yourself: what is driving your sales? Is this aligned with the consumer for repeat visits throughout all categories? For brands, ask yourself: excluding promotional campaigns, are you aligned with the right store formats that support these types of no-frills retail outlets? Understanding that less is more with today’s consumers is key. ALDI is proving this works, and this model is here to stay.  

Lastly, these strategies—understanding and embracing this model, shifting with the consumer, and knowing how to succeed in uncertain economic times—requires an understanding of what your consumer is seeking and the value they demand. Any deviation from delivering on these two priorities simply won’t work. As you seek to differentiate yourself from the competition, focus on understanding your consumer, their buying journey, and their pain points.  

How Can BSM Partners Help? 

BSM Partners’ knowledge engine, combined with industry analysis, consumer behavior mapping and product development trends, enables us to connect dots others don’t see. We transform expertise, data, trends, and custom research into the clearest picture of what’s happening and what’s next, all over the world. Let’s build your winning go-to-market strategy!  

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About the Author

Eric Rittenhouse works at BSM Partners as Business Development Manager. His areas of expertise include business development, sales and trade marketing while helping brand companies uncover and execute on opportunities to strategically dominate their niche in the consumer product space. He has completed the Blue Ocean Practical Introduction certificate by the Blue Ocean Academy and is Action Selling Master Certified by Action Selling and The Sales Board.