When I was growing up ALDI felt like our family’s little secret. Over dinners my dad would brag about how cheap yet delicious things like the ALDI brand chicken salad or pasta sauce were, showing them off like uncovered treasures to anyone who would listen. Well, it seems like the secret is out—and has been for some time. According to real-estate-services company Jones Lang Lasalle, ALDI is the fastest-growing grocer for the third year in a row.
In a press release, ALDI reported that it gained a million new customers in the last year alone, and in that same amount of time sales at existing stores saw double-digit sales growth. All the while, ALDI stores have managed to keep staples priced at around 20-40% lower than other grocery stores and offer services like the “Twice Is Nice Guarantee,” which promises that if you are not satisfied with an item you can bring it back for both a refund and a replacement.
But how can the chain afford to keep things so affordable, especially as inflation hits the grocery industry hard?
How ALDI keeps prices low
There are a few key strategies that ALDI employs to keep prices low, according to Insider. First is its focus on private label items, something that we’ve seen growing at other major retailers as well. ALDI stands out because its own brand makes up more than 90% of items sold.
The minimal size of each ALDI store, in terms of both physical space and the number of items stocked, also lowers the overhead cost of each location. At any given time ALDI tends to stock fewer than 2,000 SKUs compared to an average grocery store’s 10,000 or more, Insider reports. This not only saves the company money, but also makes the store more attractive to shoppers who might be overwhelmed by choices at other larger stores.
ALDI stores also never play music. You may not even notice the silence, but it saves the company a significant amount of money on music licensing fees.
And there are a few different ways ALDI keeps its staffing budget lower while still offering employees competitive wages and benefits. For example, there are no employees hired for specialty services like deli counters, and no one bags groceries (that’s up to the customer). Additionally, features like the DIY shopping cart system and stocking things on shelves directly in their display-ready cases save on labor and time.
ALDI’s marketing strategy
“Word of mouth is a huge contributor to our success,” Kate Kirkpatrick, ALDI Director of Communications, tells The Takeout. “We are incredibly fortunate to have a very loyal and enthusiastic fan base that takes pride in turning friends, family, and strangers into new ALDI fans.”
Due to the success of word-of-mouth marketing, ALDI rarely spends money on big advertising campaigns. In fact, its current creative marketing push is intentionally (and literally) quite small.
“In October, we installed tiny, interactive billboards in high-traffic areas in Atlanta, Dallas, and Minneapolis as a way to visually showcase the tiny prices (and huge savings) our customers can expect when they shop at our stores,” Kirkpatrick says. “Local residents were invited to join in the search for the tiny billboards and then scan the QR code to be entered to win free groceries for a year.”
Kirkpatrick says that in addition to special promotions like the ALDI Thanksgiving Price Rewind, there are also plans to drop prices on more than 80 of the store’s top-selling items including fresh and frozen vegetables, baking ingredients, ground beef, bacon, and cheese.
The best items to buy at ALDI
For the fourth year, ALDI surveyed its superfans to gather a list of their favorite things to help guide newcomers to the store. Here are the essential items, according to that survey:
- Mama Cozzi’s Pizza Kitchen Take and Bake Deli Pizza*
- Specially Selected Indulgent Greek Yogurt
- Specially Selected Ravioli
- Emporium Selection Aged Reserve White Cheddar
- Simply Nature White Cheddar Puffs
- Giambellino Peach Bellini
- PurAqua Sparkling Flavored Water
- Simply Nature Organic Extra Virgin Olive Oil
- Fresh strawberries
- Fresh Atlantic Salmon
- Kirkwood Fresh Chicken Tenderloins
- Heart to Tail Dog Treats
If you wanted to buy every single item on this list, it will cost you around $55 (based on Chicago prices; yours may vary). For comparison, a similar grocery order would run you around $77 at Whole Foods. With price differences like that, it’s no wonder that more and more people are turning to ALDI.