The Aldi grocery chain is quite different than the majority of its competitors. It's their unique way of doing business that has the U.S. CEO of Walmart keeping a close eye on them as Aldi profits soar. Customers endure several inconveniences while shopping at Aldi, but that doesn't deter them from coming back. It's quite the opposite, in fact, as Aldi grocery stores have a cult-like following unmatched by other discount stores. Communities even petition for one to open nearby if they don't have access. How exactly is Aldi raking in profits while keeping up demand? These are the unique business strategies that are setting them apart from the rest.
Aldi Has a Unique Way of Displaying Product For a Reason
Many grocery store aisles have tall shelves stacked with perfectly displayed products that are designed to catch your eye. Major grocery chains spend a lot of money hiring store stockers to work through the night unloading product. But not Aldi.
Aldi saves money and increases employee productivity using their product display method. The chain simply lines their aisles, displaying their products in the large packing boxes they came in.
Aldi Staff is Limited
Aldi saves a lot of money on their staff compared to other major grocery store chains in the U.S. They limit grocery stocker jobs, only offering part-time positions while having other employees fill in the gaps, and keep their overall staff to a minimum.
This means the staff you see at Aldi is probably overloaded with tasks to get done each workday. The Aldi website even includes the line "there's a lot to be done" on their jobs page.
The Staff Probably Wishes They Had More People Each Shift
While Aldi saves money by keeping their staff to a minimum, the workers probably wish that they had more hands-on-deck each shift. The company culture of Aldi emphasizes hard work and meeting "aggressive goals," so new hires without a strong work ethic and high energy won't make the cut.
You'll probably notice that the employees at Aldi are always working as a fast-paced team together. If not, there's a good chance that you won't see that employee during your next visit.
Aldi's Limited Store Hours Cut Costs
Many major grocery store chains are open for long store hours, providing customers more time to come in and shop. While this offers customers more flexibility to shop when it best fits their schedule, businesses also spend a lot of money keeping the store operating for all of these hours.
Aldi cuts their cost by only operating for a limited amount of hours, during peak shopping hours. Many of their locations will be open for 12 hours a day, 9am-9pm, compared to Vons stores that are open from 5am-1am. Aldi knows that their loyal customers will make it work, while they save money.
Aldi's Check Out Line Has The Efficiency Of A NASCAR Pit Stop
Aldi designed their customer experience so that once the customer has all of the items that they intend on buying, they can quickly check out and be on their way. They have a few methods to make this happen.
You'll notice that most of Aldi's products have multiple barcodes placed on them, so the cashier can locate one, scan it, and move on. The length of the conveyor belt at Aldi stores is also designed to maximize efficiency.
The Reason Why Aldi Cashiers Sit
Many of the Aldi cashiers are full-time store associates who are also expected to stock shelves, help customers, clean-up the store, and collect shopping carts as needed. With a long to-do list presented to them at each shift, Aldi store managers see that employees conserve their energy with the option to sit during cashier shifts.
This is also done to make it easier and quicker for employees to scan and work faster while seated. A Reddit user said, "We had some bosses from Germany come out to our store and they said they did a lot of research and it showed that employees work faster and better when they're sitting down."
Their Stores Are Small, Which Means Lower Rent
Piggy-backing on small parking lots, Aldi also keeps their store sizes to a minimum for the same reason: to cut costs! It seems like a straightforward solution, but many other major grocery store chains go for the large buildings to fit more product inside.
Aldi's grocery carts aren't massive like Costco's, or of various sizes. They keep the carts a consistent size that will fit enough products for the average family's weekly grocery list while still fitting down the aisles and negotiating other customers' carts.
How Much Cheaper Are Their Products, Really?
Many people shop at Aldi to save money, right? A major part of Aldi's marketing to bring customers into the store is to boast about their low prices. If you think about it though, Aldi's products are cheaper because all of them are the Aldi store brand.
When you go to competing grocery stores, they also have a store brand, along with other options. If you were to buy the store brand products there, you'd most likely be paying about the same as you would at Aldi.
The Return Policy Works In The Customer's Favor
One way that Aldi has built a loyal following is their generous return policy. Customers enjoy having a risk-free shopping experience, knowing that if they aren't satisfied with a product, they can get their money back.
Aldi stores go one step further by allowing customers to return products they weren't satisfied with, even after they might have consumed half of it! Just bring in whatever you have left and Aldi will happily give you your money back.
The Tricky Way They Make Customers Return Carts For Them
There is one thing that peeves some Aldi customers, and that's having to pay to use one of their shopping carts! In order to release a shopping cart from the row, customers insert a quarter. There's a good reason that Aldi does this though.
In order to get their quarter back, customers need to return the shopping carts to the cart station, making it more likely that they'll do so, rather than just to be a good Samaritan. This saves Aldi money by not having to employ people to retrieve the shopping carts from around the parking lot.
They Cut Costs With Small Parking Lots
Parking is expensive. Renting a parking lot to accommodate customers can end up costing businesses a lot. Another aim of Aldi's efficient shopping design is getting the customers in and out of the door, keeping the parking lot occupancy moving.
City zoning laws require a minimum number of parking spaces that businesses need to offer customers. So long as Aldi meets the minimum requirement, they're okay. That's why you may notice that there's just enough parking for everyone, but the parking lot is always a zoo.
The Two Aldis: North And South
Customers who have traveled around the US may have noticed that Aldi stores are broken into two regions: north and south. The split stemmed from the two founders of Aldi not agreeing on whether or not to sell a certain product, and led to them dividing the stores entirely.
The Aldi logo in the north is blue and white while the Aldi logo in the south is orange and blue.
They Built Solar Panels On Their Distribution Centers
Another way that Aldi saves money is by installing solar panels on the roof of their major distribution centers. Aldi has dramatically cut their costs and carbon footprint by capturing energy from the sun to power its distribution centers and stores around the world.
The distribution center in Bolton, Massachusetts generates an estimated 1,746 MWh per year of clean energy, which can power six of their grocery stores for an entire year. In a five-year span, Aldi's UK operations became "carbon neutral".
Aldi Has a Minimalist Mission Statement
A German-based company, Aldi has a mission statement of "verzicht". This roughly translates to English as "giving up" or "doing without." They have simplified their business model down to the basics to make sure that the customer gets what they need without any unnecessary elements.
This minimalist mentality is a cornerstone of how the company has become so successful, cutting costs everywhere while still maintaining quality and a loyal customer base.
The Trader Joe's Connection
Aldi grocery stores are expanding their locations across the US, as there are still regions that don't have a store. However, that's probably because those regions already have Trader's Joes, which is owned by Aldi.
Otherwise known as "Aldi Nord," Trader Joe's stores are a subsidiary of Aldi. In 1979, Aldi Nord acquired Trader Joe's, three years after it opened its first US store in Iowa. Currently, there are 1,873 Aldi locations in the U.S. and 474 Trader's Joe's locations.
They Skip On Artificial Colors, Hydrogenated Oils & Added MSG
Because the products in the store are Aldi brand, the grocery chain has more control over what ingredients are included or avoided in their products. Customers can shop confidently knowing that Aldi products don't include artificial colors, hydrogenated oils or added MSG.
In 2016, Aldi announced that by the end of the year all of its branded products would be free of these three ingredients, aiming to better cater to their core customer base of consumers who elect not to have their foods contain artificial colors, hydrogenated oils, or added MSG.
Aldi's Freshly Baked Bread Machine Holds A Secret
Aldi adopted an innovative solution to having freshly baked bread without-- you guessed it-- having to pay for more staff. The grocery chain worked around having an actual baker by installing a bread-making machine in their German stores. What they didn't expect was to have the German Bakers' Confederation knocking on their door. They wanted the machines shut down, and claimed that Aldi was using false advertising by saying their bread was "freshly baked" when really it was just reheated.
They say it's been proven by some of the bread being frozen in the center, and at varying temperatures. The bakers filed a lawsuit, then Aldi denied the court access to their machines. The bakers claim that clearly, Aldi has something to hide.
Aldi Made A Deal With Kohl's
Soon, customers will be able to shop at an Aldi within Kohl's. The department store struck a deal with Aldi to sublease space within their stores for Aldi to set-up a grocery store. In February 2019 Aldi announced that their first store within Kohl's would debut in Waukesha, Wisconsin.
It's only a test, but if the partnership proves to be beneficial, they have plans to expand to place Aldi within other Kohl's in the U.S.
Will Aldi Lose Money With Their Delivery Service?
Americans love convenience, and getting take-out and meal prep foods delivered at home is a growing trend. Aldi didn't want to miss the boat on this one and has launched their own grocery delivery service in three major cities so far: Los Angeles, Atlanta, and Dallas.
But will this cause Aldi to lose money? The discount grocery chain has proven that they can compete with major retailers with their frugal business model in the brick-and-mortar stores, but time will tell if delivery sets them back.
Products Are Tested 30 Times Before They Hit The Shelf
While the prices are affordable, loyal customers also choose to shop at Aldi because of the quality of their products. Aldi has a strict process for selecting which products will reach customers.
In a test kitchen, the product is tested no less than 30 times to ensure quality. Aldi quality control also tests each product again, annually, to make sure that the quality and consistency is there. Most customers probably don't know this though... they just know they like the food!