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Aldi’s Growth is Strong, But…

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Conventional grocers are outperforming value grocers such as Aldi during the COVID-19 crisis.

Aldi opened its 2,000th store in
July, and plans to end the year
with 2,070.

Aldi is on track to have the nation’s third-largest grocer store count by 2022, but three factors are limiting its appeal. First, the stores are typically only about 12,000 square feet. Second, the stores stock roughly just 1,400 items. Third, more than 90% of those SKUs are Aldi-exclusive store brands.

Nielsen Homescan metrics show that the value grocery format — which includes Aldi, Lidl, Save-A-Lot, etc. — captured just under 9% of UPC-coded total grocery retailer sales and grew by 12.8% in the 52 weeks ended Sept. 26 versus the same year-ago period.

That’s not bad at all. But conventional grocery retailers, which captured nearly 88% of those sales, grew by an impressive 15.7% versus the year-ago period.

And premiere fresh grocers such as Whole Foods and Sprouts, offering premiere perimeter department assortment, grabbed just over 3% of grocery retailer sales and registered the lowest, but still solid gains of 11.1% vs. the prior year.

Let’s drill down a bit to get a better picture of what’s going on. In terms of overall shopper appeal, Nielsen reports conventional grocers are shopped by 94.5% of U.S. households, or almost 2.4 times as many shoppers as value grocers and more than 4 times as many shoppers as premiere fresh grocers. Conventional grocers also held a huge advantage in terms of store traffic as the average shopper made 63.7 trips per year to that format versus 18.6 trips for value grocers and 13.7 trips for premiere fresh grocers.

Here’s an interesting breakout: value grocers had stronger appeal among the less affluent, but they experienced the greatest growth among the most affluent.

Of course it’s no surprise to see lower-income households with a stronger share of dollar sales for value grocers, and a stronger share of dollar sales among more-affluent households for conventional and especially premier fresh grocers.

But let’s zero in on the spending of those most-affluent households for a minute. Value grocers saw 32% higher sales from this group, while conventional grocers saw a 27% growth rate and premiere fresh grocers experienced a 13% gain. Given the challenges faced by many low-income households during the pandemic, value retailers achieved little year-over-year growth from the three groups at the bottom of the income scale. Higher-income shoppers are clearly spending more in value grocers than before.


I visited a remodeled store and an older format in the Cincinnati market. The remodeled store had signage outside regarding curbside pick-up. You still need a quarter to grab a shopping cart and you get it back upon return (even in coin shortage, but the parking lot was free of carts and obviously saves store-labor costs). Both stores had a modest number of cars in the parking lot and shoppers in the store — much lower traffic than I typically experience at my favorite Kroger or Costco.

Six checkout lanes, but I rarely see more than one in use. Friendly checkout experience at both stores. There appeared to be more in-store employees in each store than I have experienced in the past. Private brands or Aldi-exclusive items dominate shelves with packaging that often looks eerily like national brands.

The remodeled store had the produce department at the front as you enter, while the older store had the produce department near the right rear of the store. Some surprising premium-looking dessert items: multi-flavored cheesecake looked awesome and jarred peaches in either cinnamon or vanilla juice (which I bought). Wine offerings look to have included more high-priced wines – I bought a bottle of red which was quite good.

Poor lighting in the frozen and refrigerated cases in the older store. I purchased a package of frozen French fries which I prepared that evening (took longer to cook than noted on the package and was not as good as my favorite branded offering). Good signage and organized to a point — I found a refrigerated case in the remodeled store with an odd grouping of products (i.e., refrigerated pasta, refrigerated pizza, bottled water, bottled tea, shredded cheese, yogurt, and potato salad – see photo. The refrigerated pizza assortment appeared to be larger than frozen pizza assortment in both stores.


• Aldi (https://aldi.com) is quick to point out its price leadership position, noting “when it comes to value, Aldi won’t be beat on price” and “for 10 years running”.

• The chain reached 2,000 stores on July 21, 2020, and is planning to add 70 stores by year end. Its coast-to-coast expansion means there are now stores in 37 states.

• Curbside pickup is available in 600 stores and will reach 700 by year’s end. Grocery delivery is available via Instacart in 10,000 zip codes.

• At press time, Aldi was featuring Thanksgiving meals for less than $30 and giving every employee two $30 gift cards (each card covers the cost of a Thanksgiving meal). “Employees are welcome to use the gift cards for themselves or pass one or both along to someone in need.”

• Mama Cozzi’s Take & Bake Deli Pizza topped the list of Aldi’s 2020 Fan Favorites —its second annual survey “with more than 177,000 shoppers voting for their most-loved Aldi-exclusive products across 20 categories.” Other top 20 winners included five other refrigerated products, but no frozen items made the list.

Aldi’s Growth is Strong, But…

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Todd Hale

Todd Hale

Retail insights thought leader Todd Hale is the former senior vp of consumer and shopper insights at Nielsen and now serves as principal at Cincinnati-based Todd Hale, LLC. A popular conference presenter, he also speaks at large and small company events — everything from board meetings to sales meetings to planning sessions. Todd’s discussions include the latest consumer and retail trends with insights on how manufacturers and retailers can enhance both near- and long-term market performance. He can be reached at todd@toddhalellc.com.

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