ALDI is a German-based supermarket chain that is operating in more than 20 countries all over the world. The supermarket has opened many stores in the US and is doing glorious business since 2017. If you have visited any of the ALDI stores, you have surely noticed how cheap their products are. So, you must wonder, “Why is ALDI so cheap?”
The main objective of ALDI is to sell good quality products at a cheap price. To make this possible, the stores spend a small amount of money to operate daily activities. The stores are small, which means low rent, and they do not depend on selling national brands.
In this article, I will talk about the reasons why items at ALDI stores are so cheap. Currently, there are no other supermarkets that can compete with ALDI’s prices. So, let’s take a look at why that is.
Reasons Why ALDI Products Are So Cheap
Although the prices of the products at ALDI are cheap, it does not mean that the quality of the products is also cheap. ALDI stores follow various strategies to keep the maintenance expenses minimal. Thus, they can sell products at a cheaper rate without putting a dent on their profit.
Here are some reasons how ALDI sells products at such cheap prices:
The Stores do not Depend on Brand Names
Most of the supermarkets fill up their shelves with big-brand products. They have to buy these products from different companies. Therefore, it becomes impossible to sell items at a cheap rate. They have to make a profit to run the stores.
ALDI is not interested in selling brands because they do not want to spend a lot of money on brand names. About 90 percent of the products sold in ALDI stores are private label and bought from local retailers. Thus, they can keep the low price of the products. The products might not be from a brand, but the quality is similar. So, customers like the products.
Discounted and Overstocked Brand Products
Although ALDI stores mostly depend on local brand products, they also offer a few brand products too. But they buy either discounted products or overstocked products directly from these brand companies.
As a result, ALDI can buy these products at a reduced price from the brands. This is why the brand products found in ALDI stores are also quite cheap.
Small Inventory and Space
You will find thousands of products displayed in the supermarkets but not in ALDI. The ALDI stores stock only 900 core products at a time. So, they do not need large spaces to display their products. As they use small stores, they do not have to pay high rents.
Through this simple strategy, they save a lot of money, and they do not need to add extra charges on the products to make profits.
A Few Numbers of Employees
When you visit popular supermarkets like Wal-Mart and Costco, you will see a lot of employees working in the stores. However, at ALDI stores, only 7/8 employees work at the same shift. There are a few employees because the stores are small, stocking products are easy, and working hours are not that long.
Saving the employee cost helps ALDI to keep product prices low. Also, the staff working at the stores get a higher salary compared to people working at different superstores.
A Simple Way of Restocking
At other stores, employees have to get the products out of the boxes and put them on the display. It is quite a time-consuming job, and so the stores have to hire more employees. More employees mean more wages.
ALDI stores do not have a fancy display system. The workers stack the boxes and packets on the shelves. Sometimes they just put the boxes on top of each other. Customers come to the stores and get their products out of the boxes. Hence, time is saved, and workers are not pressured to arrange products every time they restock.
Using Energy Saving Lights
About a few years ago, ALDI announced they are remodeling the stores to make them more energy-efficient. Instead of depending too much on electric lights, the stores are modeled to bring natural light (open ceilings). Also, they use LED lights to save electricity costs.
Saving electric costs ALDI can afford to keep their prices lower as well. This is an innovative idea that not only saves ALDI thousands of dollars every year but also is a great step forward in protecting the environment.
ALDI does not believe in fancy decorations and expensive packaging to seek customer attention. The stores are not full of decorative items or posters. All the stores are simple, and thus they save money on unnecessary decorations.
Bring Your Bag System
The customers are not given any plastic bags from the ALDI stores. They have a BYOB or “Bring your own bag” policy, which means the customers have to bring their own bags to the stores. But if you need extra bags from the store, you have to pay for it.
Following this system, ALDI is not only cutting the cost of buying plastic bags, but also promoting an environment-friendly attitude. The stores are also introducing environment friendly packaging of various products.
Shopping Cart Rental System
Another reason why ALDI stores do not need too many employees is that they have a shopping cart rental system. The customers have to pay 25 cents to unlock carts. However, they will get their coins back when they return the cart to the corral.
Employees from other superstores are assigned to collect carts left by the customers at random places. But in ALDI, the customers are motivated to be responsible for the carts return.
Limited Budget for Advertisement
You have probably seen tons of TV commercials of supermarkets like Wal-Mart and Target. But how many ads of ALDI have you seen? Well, not too many, right? ALDI does not put advertisements about their stores as frequently as other superstores.
Instead of spending money on making advertisements, ALDI saves the money as profit and continues to sell low-priced products. It depends on the promotions by happy customers who are satisfied with buying products at a low cost. Interestingly, the strategy works wonderfully for the stores.
No In-House Butchers
In many supermarkets, there is a separate section for in-house butchers, which means extra cost. But in ALDI stores, there are no in-house butcher’s sections. Besides, the stores do not sell branded meats. There are a few workers in the stores, so the meats are not as prepared as the meats sold in other supermarkets. This is one reason why the meats are cheap.
Again, most of their meat comes from local butcher’s shops and farms. As the meats are brought from the local shops, they are transported to the stores quickly, and they are fresh. Also, the stores have to pay less for transportation costs. Hence, the prices of meat at ALDI stores are really low.
Many people often doubt the quality of the meats. There are mixed reviews about the meats. But the customers who frequently visit ALDI stores have said that they are satisfied with the meat, and prices fixed for them.
Selling Pre-Packed Produce
The fruits and vegetables sold in ALDI stores are pre-packed. Meaning customers cannot pick the best products according to their likings. Since the goods are pre-bagged, there is no chance for customers to check them. Therefore, the quality of the products is questionable. ALDI is aware of this, and so they fix a cheap price for pre-packed fruits and vegetables.
Purchasing a High Volume of Products
ALDI avoids buying the same type of product from different brands. For example, if they bring ketchup to the stores they will buy the same brand of ketchup in a large number. As a result, they get discounts from the ketchup retailer.
You may think that people may not want to buy the Ketchup brand found in the store, but you are wrong. ALDI stores buy products with confidence, knowing what their customers will buy them. Interestingly, many customers like to buy products from ALDI because they do not get confused about deciding which brand to choose from.
The typical supermarkets are open for 12, 16, or even 18 hours a day. It is very convenient for customers who suddenly need to buy anything. However, it is not free of charge. The customer might have to pay extra for the services.
On the contrary, ALDI superstores are open only for 11 hours or fewer hours than that. This way, they can save a lot of operational expenses and employee wages. Since ALDI can save money like this, it does not increase the prices of the products.
As the stores are operational only for 11 hours a day, the stores have to be super-fast to checkout items. Interestingly, you will not see a long line standing in front of the checkouts even though there are a few employees.
Cashiers often struggle while checking the barcodes of the products. But it is not the case in ALDI stores. The products have multiple barcodes on the packaging. Hence, it gets easier for the cashiers to scan the products and give them to the customers quickly. So, it saves a lot of time and money.
No Unnecessary or Extra Costs
When you step into any superstore, you will hear popular music or classical music playing. It is a way for the stores to keep the customers entertained for a while and make their shopping experience pleasant. However, ALDI stores do not spend extra on such matters. They do not even offer ‘Buy one and get one free’ offers to increase product sales.
Even a seemingly less costly arrangement like music systems at stores can actually cost a significant amount at the end of the month. Thus, ALDI does not have any budgets for exaggerations. The customers become happy enough when they get excellent products at a cheap rate, and they do not care about free products.
No Clearance Offers
There is no clearance section at ALDI stores because they strive for limited wastage. The stores bring adequate products so that they can sell most of the products. This is another reason why there are not many “buy one get one” offers. Instead of giving away products, ALDI reduces the prices of products close to expiration dates.
Customers First, Then Profit
ALDI wants to sell products at a cheap rate because it wants to have happy and loyal customers. Most of the superstores in the market exist only to make profits from the customers. But ALDI has a different belief.
It believes customer satisfaction is the most important thing for the business and then comes making profits. Therefore, it focuses on strategies to maintain a cheap price for the customers.
Should You Buy From ALDI?
In a world where big corporations are trying to rip us off every way they can, it is understandable why people might be suspicious of companies like ALDI. Their cheap prices and offers make you almost feel there’s something wrong with their products. But I on behalf of other regular ALDI shoppers would like to say, that is not the case.
As you’ve probably learned that ALDI tries their best to reduce their costs as much as they can. They make sure they spend as less as possible on electricity, shipment, maintenance and other costs. This is how they are able to keep their prices low. They are not doing any malpractice. In fact, many of their attempts at reducing costs are actually good for the environment.
So, yes. It is perfectly safe to buy products from ALDI. Thousands of Americans do it. And there is no reason for you to miss out on their praise worthy pricings.
By now, you have definitely got your answer to “Why is ALDI so cheap”? ALDI has become one of the household names in the US not just for the cheap price of the products but also for providing quality products. And if you have any doubt about the products, just visit any ALDI store near you for your next grocery shopping and decide for yourself if they are worth your money.
Hope this article was helpful. Have a great day!