Bare-bones Aldi expands as US shoppers struggle
Published on: 24 Aug 2009 14:03 CET
“When money is tight, only the price counts,” news agency AFP reported on Monday. “In the crisis the service-spoiled Americans are suddenly going to Aldi.”
According to sector analyst Retail Planet, Aldi increased sales by 21 percent in 2008. The bare-bones chain is owned by Germany’s richest men, the brothers Theo and Karl Albrecht.
But American customers still have to get used to certain German shopping rules, such as paying a deposit for the use of a shopping cart and paying for plastic shopping bags. They also have to contend with the stripped-down retail space and 1,400 mostly generic items displayed on unglamorous wood palettes.
It’s far from the glossy retail presentation that Americans have become accustomed to. But according to a recent poll by pollster Rasmussen Reports, 51 percent of Americans are spending less on consumer goods, presenting an opportunity for what Aldi calls its “less is more approach.”
The company, which also owns the popular Trader Joe’s grocery stores, plans to increase their retail spaces by some 10 percent each year, AFP reported. Aldi, which first launched in the United States in Iowa in 1976, added 100 stores last year alone.
Ten new stores recently opened in Florida, where unemployment rates have spiked, a situation a regional Aldi manager there called the “perfect time” for expansion. Meanwhile the company plans to open 25 new stores in Texas, where a $50-million distribution centre is also under construction.
“The store isn’t very pretty,” housewife Tammy Forman said while shopping at a Hyattsville, Florida location. “But it’s cheap.”
While US unions have criticised the retailer for blocking their efforts, Aldi has defended their actions saying their workers have “sufficient pay and social benefits.” Indeed, the company provides health insurance for workers who log more than 20 hours of work per week – something market leader Wal-Mart does not do for its workers.