The Untold Truth Of Aldi
Aldi hasn’t always had the best reputation as an American grocery option. For years, it was considered inferior to better-known chains, and many assumed its lower costs also meant lower quality. But lately, Aldi has been changing things up in a major way. It’s shedding its misfit label and working hard to become the number one grocery destination for many American shoppers — and it’s working.
In 2017, Aldi announced it was planning on becoming a major competitor in the US grocery store market. At the time the announcement came, it had around 1,600 stores across the country, and its game plan included raising that to 2,500 and investing a mind-blowing $3.4 billion into current and future American endeavors. The push into the American market certainly isn’t anything new — the German company had first gained a foothold in its home country before spreading across Europe, and there’s a fascinating history behind this up-and-coming U.S. chain.
Aldi’s Mom-and-Pop beginnings
Aldi’s is a multi-billion dollar, global company, but it started with a single grocery store in Essen, Germany. It was called the Karl Albrecht Spiritousen and Lebensmittel shop, was run by Karl Albrecht and his wife, and opened its doors in 1913. Opening a grocery store wasn’t the elder Albrecht’s first career choice, and it was only after emphysema brought his work in the mines to a halt that he opened the store. Their sons, Theo and Karl, worked at the store as well, and took it over in 1945. They’re the ones that took the company global, but it’s been a rocky road.
In spite of the numerous growing pains the company has been through, that original location is still open. It still keeps regular business hours, but it’s closed on Sunday.
World War II influenced its business model
As the company spread across the globe, Aldi became known for its low prices and bare-bones set-up. That’s no coincidence, and according to the Independent’s profile on Karl Albrecht, that economic outlook started in the years around World War II.
Both brothers served with Germany’s Wehrmacht during the war. Theo fought in Africa with Erwin Rommel, while Karl was sent to — and wounded on — the Russian front. When they returned home, it was to a post-war Germany that clearly had no use for all the fancy — and expensive — extras that grocery stores typically came with. That even went as far as "extras" like shelves for merchandise, and the earliest Aldi stores didn’t even have those. The Albrecht brothers developed their spartan business plan based on what they knew post-war shoppers wanted: a good product, full stocks, and affordable prices.
There are two different Aldis
Today, there are actually two different companies: Aldi Nord and Aldi Sud, or North and South. In the 1960s, Theo and Karl Albrecht couldn’t agree on whether or not they were going to allow their stores to sell cigarettes. They came up with a pretty shocking solution, and instead of compromising, they divided the company in half. There’s a line that runs across Germany — known as the "Aldi equator" — and Theo took the north while Karl took the south.
You can tell the difference by looking at the logo: Nord’s logo is a basic blue and white, Sud’s logo is orange and blue. It’s the southern Aldi that’s a bit fancier, and when it came time to expand to the rest of the world, those countries were divided up, too. Stores in areas like the UK, Ireland, and Australia are all Aldi Sud, while you’re shopping at Aldi Nord if you go into France or Poland.
There’s a reason there are boxes on the shelves
One of the first things you might notice when you’re looking at the shelves in Aldi is that the product is still in boxes. That’s not employees being lazy, it’s exactly the opposite. Frugal Bites got a peek behind the curtain, so to speak, and got to visit Aldi’s Illinois offices. According to them, product is shipped in boxes that aren’t just functional — they’re a part of what’s called the "invisible case" project by being designed to blend in with product packaging. Instead of having employees spend time opening boxes and putting individual products on shelves, they open the box and put that on the shelf — saving hours and, in turn, wages. And it’s necessary for employees; according to one ex-employee’s I AmA Reddit, they were required to empty an entire pallet worth of goods in 30 minutes. That’s no time at all!
Business Insider says you’ll see efficiency packaging elsewhere, too. Things that aren’t boxed — like produce — are wrapped in bundles and milk is shipped pre-racked, all to streamline the process from receiving to shelving to checkout.
It keeps staffing to a minimum
Go to any other grocery store, and you’ll see people sitting at the checkouts, others stocking shelves, and others at designated counters. Aldi is different, and according to its recruitment guidelines, there are only four different positions at each store. There’s the store manager and manager trainee, as well as the shift manager and store associate, who can be doing anything from working the cash register to restocking shelves and cleaning up.
Aldi isn’t very forthcoming about things like staffing and business practices, so most information is from former employees. According to responses on Indeed, staffing is kept to a minimum with only eight to 10 people being employed at each store and only two or three working any given shift. This low level of staffing may be part of the reason it’s able to keep prices so low.
Employees don’t necessarily love it
Keeping employees happy is a key part of running a successful business, and if you go to Aldi and notice that everyone seems a little stressed — especially when you ask them a question — it’s not you.
More than 2,000 employees reviewed Aldi on the Glassdoor, and only about half would recommend working there. (Similar results can be seen in other countries, like Ireland and Australia). There’s a definite trend in what people have to say, too, with employees (and former employees) saying that while the pay, benefits, and opportunities are good, they often found a difficulty in balancing work life with their home life, and that they didn’t get enough hours to make the money they needed. Employee reviews on other sites — like Indeed — are less generous. Their testimony claims Aldi and its managers are only concerned with meeting numbers, working in a major time crunch, and filling quotas, suggesting that it might be a great place to work… but only for a certain type of person.
There are some tricks in place to make checking out go so fast
According to Forbes, Aldi checkouts move about 40 percent faster than those of other retail stores, and that’s great news if you just want to get in, get out, and get home (and who doesn’t?). There are a couple of things it has put in place to help keep things moving, including conveyor belts just long enough so that one person can unload a cart full of groceries and have enough space for everything.
Take a look at some of the products, too. You’ll notice most of them have more than one barcode — there are multiple barcodes so no matter how the cashier picks something up, it’s in the perfect position to be scanned.
It’s not as cheap as it claims (but it’s still cheap)
Aldi stakes its reputation not just on quality, but on how much cheaper it is than its competitors. Andy Prescott from Clark.com did some serious leg work, wanting to find out if Aldi really was exactly what it advertised. In this case, he had a flier claiming Aldi was 42% cheaper than its competitors. That’s a lot, so he headed to both Aldi and Walmart, found both the national name brands and the store brands of the exact same items, and compared the prices.
Prescott looked at a range of products, and when he compared Walmart’s name brand pricing to Aldi’s store brand pricing, he found there was a 41 percent savings to be had by shopping at Aldi. Not bad! But if you’re looking to save money, you’re buying store brands… so how do those compare?
He found that Aldi is still cheaper than Walmart’s store brand, by about 20%. That’s no 42%, but it’s still a significant number — and in today’s world, most of us watch our pennies where we can.
It charges a deposit to use its carts for a very good reason
It’s a little disconcerting, the first time you go shopping at Aldi. It starts with the carts: What is this thing, and why the heck do I need to pay to use it? You’ll get the money back, as long as you’re a good citizen and return the cart.
There are a couple of reasons for that little gadget on the shopping carts, and according to Michael Roberto, Professor of Management at Bryant University, it simply has to do with the bottom line. When customers return their carts, Aldi doesn’t need to pay someone else to do it.
It’s only open during peak hours
Stores that are open 24/7 are all but empty at 2 a.m., meaning you can cruise the aisles, through the checkout line, and out the door in record time. You’re not going to be doing that at Aldi, though, as it’s only open during peak hours. That means most stores open at 9 a.m. and they’re closed by either 8 or 9 p.m.
Like a lot of things Aldi does, this is simply to conserve money. According to Capital Strategies, Inc.‘s profile on Aldi, staying open later would just cost more in wages and overhead, and there’s not enough profit to be made in the middle of the night to make that worthwhile.
And, before you protest too loudly, remember that Aldi is still a European chain. Early closing times aren’t out of the norm for Europe, they’re expected. Even larger grocery stores — like Tesco, Dunnes, and even Waitrose are packing up to go home by that time.
Some lucky people can get their groceries delivered
In August of 2017, Aldi announced it was rolling out a plan to join the grocery delivery craze, starting with Dallas, Atlanta, and Los Angeles. According to Food and Wine, those were the first cities selected to see how Aldi customers responded to the idea that they could order their groceries via Instacart and have that order delivered right to their door. It’s a potential lifesaver for busy families, and it’s a growing market.
Aldi already created some serious industry waves when it took on the established supermarket giants and big box stores, and now, it’s taking aim at another Goliath: Amazon. When Amazon acquired Whole Foods, it pretty much became the major player in the grocery delivery service, and Instacart spokesperson Dacyl Armendariz says that has to change. With the announcement came hints the service would expand to cover more cities — and it’s already grown to include Chicagoland — but just who is likely to get the service next remains a mystery.
It caused a major stir with its bread-on-demand machines
In November 2010, The Food Channel reported that hundreds of Aldi stores across Germany were creating major controversy. According to Aldi, its in-store baking machines would spit out freshly baked rolls, made to order, in a matter of seconds. While Aldi claimed the machines were a "technological innovation," the German Bakers’ Confederation said they were an affront to the country’s centuries of baking traditions.
The organization went further, saying Aldi was outright lying about how fresh-baked the bread really was. By the time Aldi and the bakers met in court in 2011, DW says there were 1,770 Aldi Sud stories equipped with the machine. It even escalated to the point where the courts ordered Aldi to let them inspect the machines and the raw dough … and Aldi said no.
Aldi said it was protecting trade secrets, while the German Bakers’ Confederation said it was clear "they have something to hide." They’ve claimed false advertising and accused Aldi of skimping on ingredients.
One of the founders was kidnapped
Aldi might be known as a discount store, but its winning formula has made the Albrecht family very, very rich. When Karl died in 2014, he was worth an estimated $25.9 billion, and when Theo died in 2010, he was worth around $24.7 billion. It’s no wonder that kidnappers set their sights on the brothers way back in 1971.
It was Theo who was kidnapped at gunpoint, and spent 17 days in a closet in Dusseldorf while his kidnappers negotiated for the ransom. They did get the money (Theo later attempted to claim the ransom as a business expense on his taxes) and released him, but were ultimately identified. The two kidnappers served eight and a half years in prison, and when they both died in 2017, they left millions unaccounted for, with each one insisting they didn’t know what happened to the rest of the money.
The kidnapping left both brothers understandably shaken, and both adopted an extremely reclusive lifestyle. They stopped making comments in public, always drove in separate cars, and never took the same route twice.
There’s a rigorous testing process for products
Since Aldi built its reputation on affordability, it’s easy to associate that with a cheap product. But it takes the idea of quality very seriously, and in 2013 it invited The Telegraph into its headquarters. It was the first time an "outsider" was allowed through those doors.
Aldi has an entire team that works in its test kitchens, and they adhere to strict policies. Product purchasers join the test kitchen twice a day, sample about 180 meals every week, and try each product 30 times before it makes it to Aldi’s shelves. They’re not done yet — they re-test every product at least once a year, and every time one of Aldi’s competitors launches a similar product, the team goes back to the test kitchen. In the test kitchen, cost isn’t taken into consideration at all — something might be cheap, but Aldi still insists that it be good. Once a product meets the approval of the test kitchen, it then has to measure up to the standards of Aldi’s managing directors … and then, it’s finally offered to customers.
It removed artificial colors, hydrogenated oils, and MSG from Aldi products
Now more than ever, we’re aware of the additives in our foods, and in 2015 Aldi announced it would no longer manufacture or sell products with questionable ingredients.
With the announcement (via Consumerist), it confirmed it was no longer selling items with partially hydrogenated oils, artificial and synthetic coloring, or added MSG. According to CEO Jason Hart, about 90% of the products sold at Aldi are its own brand, so that gives it some serious control over the ingredients in the food it sells. And, if you haven’t noticed a difference yet, you won’t. Aldi didn’t make the announcement until after it had already done it.
The weird relationship between Aldi and Trader Joe’s
There’s only one country where Aldi Nord and Aldi Sud share pieces of the grocery store pie, and that’s in the U.S. You wouldn’t know it, though, and that’s because Aldi Sud — with its blue and orange logo — does business as Aldi, and Aldi Nord goes by another name: Trader Joe’s. What? Shocking, we know! But take a closer look, and it’ll make sense.
Trader Joe’s is an Americanized version of Aldi. Gone are some of the elements you’re more likely to see in a European grocery store, like putting some cash down to rent a cart (yes, you get it back), employees that don’t bag your groceries for you, and a reliance on reusable bags. But some elements remain, especially private labeling and a definite lack of advertising. Now it all makes sense, doesn’t it?
You’ll be seeing Aldi at Kohl’s
What do Aldi and Kohl’s have in common? Absolutely nothing, at first glance, but in 2018 it was announced Kohl’s was going to start subletting space in its stores to Aldi.
It started when around 300 Kohl’s stores were remodeled to free up space that would be sublet to partners in an attempt to boost traffic and profits, and Aldi was a logical choice. On one hand, it’s turning unprofitable space in Kohl’s into profits, and it’s allowing them both to take shots at the competition — particularly Target. As for Aldi, it’s focusing on expanding the same kind of product lines Kohl’s customers are looking for — fresh options and fine European foods. Forbes says the partnership is a relatively small part of Aldi’s U.S. expansion plans, but it could give it a serious boost in terms of building credibility as a respectable grocery store.
The program will start in only 10 stores, and CNBC says it has the potential to be a win-win for both sides.
It’s all about simplicity and thriftiness
Aldi doesn’t allow its employees to talk to the media, but when regional manager Dieter Brandes left Aldi, he became an author — and he started with a book that revealed Aldi’s business plan. According to Brandes, its philosophy of keeping things simple is best summed up by a single word: verzicht. There’s no direct English translation, but The Irish Times says it’s a combination of "doing without" and "giving up." Brandes says it boils down to setting a goal and getting rid of everything else, even the massive amount of sales data most retailers use — and tens of thousands of extra products.
The billionaire owners of Aldi practiced what they preached, too. Theo Albrecht was known for using pencils down to the nubs, and The Washington Post says one former employee remembered being criticized by the owner for using paper that was too thick and therefore, wasteful. When the Albrecht brothers bought their burial plots at a municipal cemetery, according to The Guardian, it was fairly abandoned. They dispatched a handful of Aldi’s trucks full of rhododendrons and shrubs to clean up the cemetery … but only when the shrubs went on sale.
Aldi won’t take manufacturers’ coupons
Manufacturers’ coupons are usually a consumer staple, an easy way to save money on the brand-name items you love. But Aldi doesn’t accept manufacturers’ coupons, leaving some avid coupon clippers confused. The reason for prohibiting product discounts in this manner is simple: Aldi’s product line is comprised mostly of Aldi-branded items. The company touts the quality of its products as being just as high if not higher than similar brand-name items. For non-Aldi items, prices are negotiated with suppliers to provide the best price point possible, which takes the possibility of using manufacturers’ coupons off the table. And if you’re looking for a loyalty program to reap sweet discounts, keep shopping. Aldi doesn’t offer that, either.
How does the lack of coupons impact a shopper’s buying experience at Aldi? The website Aldi Reviewer points out that by forgoing the coupon experience, Aldi has made it easy for shoppers to get in, get what they need, and get on with their lives. It’s a way to declutter the mental gymnastics of getting the most for your money. For shoppers who value their time as much as their money, this is a boon.
Aldi has its own baby product line
As any grocery chain worth its bottom line knows, private label brands can be a sales leader, especially when it comes to necessities. Aldi knows this too, and among its expansive selection of private branded lines is Little Journey, an array of products dedicated to its tiniest consumers. With diapers, wipes, formula, and infant food, Aldi provides its own versions of the most essential items on a parent’s shopping list. These items are held to high standards of safety and quality while remaining at a price point that Aldi’s promotes as being half the cost of other brands. That’s quite a savings for new moms and dads hoping to stretch their dollars as far as possible.
Parents interested in trying out Little Journey products for themselves to make the comparison will be happy to know that none other than Good Housekeeping has bestowed its seal of approval on more than 50 items in the line. This stamp of approval has been alerting consumers to the lab-tested integrity of all sorts of products since 1909. Having trustworthy baby products available at affordable prices provides a generous bit of budgetary wiggle room new parents can appreciate.
Aldi doesn’t just do grocery stores
Beyond groceries, Aldi’s commercial enterprises extend to other offerings for its European consumers to enjoy. With Aldi Talk, prepaid cell phone users in Germany can pick up price-friendly SIM cards. These cards provide a variety of packages ranging from a basic talk plan to unlimited talk and text with up to 5.5 GB of high-speed data included. There are also special deals available for Aldi Life Musik, a subscription streaming service for music and audiobooks powered by Napster. Rather than partnering with another telecom service for these products, Aldi Talk is the provider, making this grocery chain a full-fledged player in the German telecom market.
Shoppers accustomed to filling up their gas tank during their trip to the grocery store can take advantage of Diskont, Aldi’s discount fuel station. In 2018, Aldi announced a pilot program that would build 10 fueling stations in its German locations. In addition to petrol, the stations also include charging stations for electric vehicles. Since 2009, fuel stations have been a part of Hofer, Aldi’s Austrian stores, offering prices that were such a bargain that people queued up for gas (via Retail Wire).
Aldi has a collection of cute Christmas mascots
Is it even Christmas for a retailer without a mascot to help ring in the holidays? Aldi knows the value of cute characters to capture the festive Christmas spirit. Its adorable Kevin the Carrot debuted in 2016, with his girlfriend Katie making her first appearance a year later. Eventually, the family grew to include the carrot children Chantenay, Jasper, and the cleverly named Baby Carrot. These festive produce characters appeared in popular holiday ads and as limited-edition stuffed toys available in store, with new figures added each year. In 2021, the new member was Ebanana Scrooge, the bah-humbugging foil to Kevin’s Christmas cheer.
Though the seasonal stuffies are only available in the U.K. — even making a special appearance for Queen Elizabeth’s Platinum Jubilee celebration — they’ve caused quite a commotion over the years. Aldi has resorted to issuing a sternly worded message to its customers that only two plushies are allowed per shopper. These hot potatoes were selling for as much as 10 times their original retail price via eBay, indicating an immense level of popularity that will hopefully bring the cute critters to the U.S. soon to help kick off the Christmas celebration season.