Aldi Darned

The New York Times ran an article showing that Wal-Mart and Target may have a surprising competitor: Aldi.

Aldi first came to the United States in 1976, but it opened a relatively small number of stores a year — 25 or so on average. Within the last few years, it has accelerated its expansion by adding more than 250 stores, with plans for 80 more both in 2011 and 2012, said Jason Hart, co-president of Aldi’s United States division, in a recent interview.

The company capitalizes on the bargain hunter, who is not embarrassed to choose frugality over name brands. Aldi’s mainly sells its own private-label items at cheap prices — a five-ounce bacon-wrapped beef filet costs $1.79 at the Queens store.

“It’s the one format that seems to have increased the most, and has sustained a number of new stores,” during and after the recession, said Jonathan P. Feeney, a grocery analyst with Janney Capital Markets. As “prices are going to go up, it’s going to be a growing opportunity.”

Wal-Mart and Target are behind in the small market scene, and belatedly they have realized they overlooked a real opportunity.  In exchange for value customers don't have as much choice, but for bargain hunters it is a good way to extend their grocery budget.  I can say from experience some of their products are  actually better than what I purchase at a Kroger or Wal-Mart.  It also teaches a lesson to consumers and sets more realistic expectations.  Sometimes you have to shop around for savings.  Sometimes you don't always get what you want, and stores aren't obligated to beg you to come in.  The savings for advertising and other expenses have allowed an underdog to be competitive against the likes of Wal-Mart.  Or in shopper lingo, that's like a BOGO neener-neener.