There’s a little known retailer in the grocery business called Aldi that’s causing upset and turmoil everywhere it goes. The typical Aldi store is about the size of a corner drugstore, has a very limited selection of mostly store brands, limited hours and extremely low prices.
Aldi has been a formidable foe to Wal-Mart. In fact, the supercenter giant tried to go into Aldi’s native Germany and was beaten severely on the sales front. Wal-Mart is usually 15-20% cheaper than a traditional supermarket, but it still has been no competition for Aldi either at home or abroad. Now Wal-Mart is taking a cue from Aldi and is set to open around 800 mini-markets in the mold of Aldi throughout the United States. Expect limited selection and dirt-cheap prices when Wal-Mart tries out this model.
At the same time, Aldi’s small format coupled with low prices has put the squeeze on drug store chains. So now the drugstore chains are trying to copy Aldi too.
Rite-Aid is experimenting in a handful of South Carolina stores with a mix of cheap food and traditional drug store items. And Walgreens has announced they too will test a similar format in small stores, with an eye toward carrying 750 grocery items and featuring cheap prices. (Aldi typically has twice that amount of items, while a supermarket might have 50,000 items.)
The real beneficiary from the market-share war, with Aldi getting competition from all angles, will be you. You’ll have more choice and cheaper prices. I’m seeing so many stories about food prices going up and up, but these new competitors will make it possible to fight back with your wallet and get those lower prices.