This is how Aldi is killing Waitrose in Britain’s supermarket price warAldi has been called the world’s best grocery chain.
The German company has more than 8,000 stores around the world and is rapidly expanding. Aldi attracted over half a million new customers this year and hurdled over Waitrose to become the sixth biggest supermarket in the UK.
One reason people love Aldi?
The brand’s famously low prices. Its low prices meant that the chain saw a 7% increase in basket sizes and an increase in sales of 16.8% in the latest period, much higher than any of its UK competitors.
Aldi employs a few smart strategies to allow them to sell groceries for so cheap.
1. Private labels
Unlike Sainsburys, ASDA and other UK supermarkets, you won’t find many brand names at Aldi.
About 90% of the products at the grocer are private-label. By eliminating the middle man, Aldi can pass the savings on to consumers.
Aldi sticks to private labels and offers fewer items than the typical grocery store, a strategy also used by Costco. While the typical store offers 40,000 items, Aldi offers just 1,400.
Selling fewer items increases sales volume and helps drive discounts.
2. No-frills design
Aldi uses boxes instead of shelves when possible, according to frugalbites.com. This frees up workers from having to stock shelves constantly. Once a product runs out, the workers simply replace it with a box.
Stores utilize natural and energy efficient lighting to cut down on utility costs.
3. Insane efficiency
Aldi has designed a business that is so efficient that it needs fewer workers than the average grocery store.
The company arranges for milk to arrive on racks so it can be restocked in seconds, according to frugalbites. Produce is packaged together and sold so cashiers don’t have to weigh items at check-out.
Even Aldi’s private-label packaging is designed for easy scanning with its check-out systems.
4. Puts customers to work
Aldi asks customers to bring bags from home for their groceries. If they want bags, they have to pay a small fee for them.
Customers also pay a quarter deposit to use a shopping cart at Aldi.
“The shopping cart rental system is one of many Aldi efficiencies that enable us to keep our prices so low,” the company writes on its website. “By not having to hire someone to police the shopping carts, we are able to pass the savings on to our customers.”