Moving On

It was interesting to hear that the little food store we shop here at in Pennsylvania made headline news in Connecticut. From the looks if it, it's not going to be so little anymore! D found, during his endless hours of either fiddling or researching, a store called Aldi that has really good prices on good quality items. So we tried it out and have been going there ever since. It's not like your typical Stop & Shop or Big Y (which is the point) in that you bring your own bags, you have to pay with cash or debit only, and you need to insert a quarter into your shopping cart to get it loose from the others...you get the quarter back once you snap your cart back into place with all the other carts. It's all very rudimentary, but it's inexpensive and that's really the bottom line for us! Inexpensive as in we went shopping last weekend and spent $43.44 to pack our fridge and freezer which will last us a month. I always go out for fresh fruits and veggies when necessairy, but that's about it. Another cool thing we learned was that Aldi owns another of our favorite food stores: Trader Joe's! While we were shopping last week, we kept on mentioning how much Aldi reminded us of a scaled-down Trader Joe's, and, well, we were right! Anyway, below is the article published in the Hartford Courant that D and I agree could have been written by us because it totally defines our food shopping experience there. I'm not exactly sure why I find this all to be so cool, so if you don't share in my awe and excitement, I will totally understand!


From courant.com
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Aldi Gets Aggressive
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Low-Price, No-Frills German Grocery Chain To Add 50 Stores In State

By JANICE PODSADA
Courant Staff Writer

February 11, 2007

WALLINGFORD -- Three years ago when Kristen Torres, a new bride, complained to her family about the high price of groceries, her Aunt Gilda told her to shop at Aldi Foods.

Except for a few stops at Wal-Mart and Big Y, Torres, 22, and her husband, Vinny, 24, say they now do most of their grocery shopping at Aldi, a chain that now has four stores in Connecticut.

"We get all our basics here," Kristen Torres said as she unbuckled her 10-month-old son, Vincente, from the back seat of her car.

For the past seven years, Aldi has been an almost unnoticeable presence in the state. Now the privately owned German retailer plans to build a 500,000-square-foot distribution center in South Windsor that would supply about 70 proposed Aldi Food stores - 50 in Connecticut and 20 in Massachusetts and Rhode Island. When completed, the distribution center would employ about 75.

At a time when grocery chain stores seem to fall into one of two categories - the football-field-sized warehouse or the luxurious specialty store with hardwood floors and an espresso bar - Aldi is a throwback.

The company offers plain vanilla, no-frills, no-Muzak ambience in exchange for low prices: $3.99 for a Tyson-brand whole roasted chicken, 79 cents for a four-pack of pudding cups and 89 cents for a loaf of L'Oven Fresh wheat bread.

"You pay half the price," Torres said. "I love the fact that milk is always $1.99 a gallon."

Bucking the mega-size trend in size and selection, the typical Aldi store, which measures about 18,000 square feet, is a little larger than the traditional neighborhood grocery store.

Unlike big chain stores that carry more than 25,000 brands, Aldi stores stock fewer than 1,000, 90 percent of which are its own private-label brands. Merchandise is stacked on rolling steel pallets. Aldi sells some fresh fruits and vegetables, but they are prepackaged, as is the small selection of fresh meats. There's no pharmacy and no meat counter, and there are no splashy displays.

Aldi hopes to break ground on the warehouse this spring and complete construction by the fall of 2008, said Bruce Persohn, vice president of the company's northeastern division.

Officials at the company's U.S. headquarters in Batavia, Ill., referred questions to Persohn, whose office is in South Windsor.

When and where those 70 new stores will open is a question.

"We're in the infant stages of our site selection," said Persohn, who declined to disclose details of the expansion.

However, if history is any indicator, Aldi will hold off opening stores until it has the cash on hand, said Neil Z. Stern, a senior partner with McMillan/Doolittle LLP, a Chicago-based retail consulting firm.

"They're a very different retail company," said Stern, who has been tracking Aldi for 20 years. "They own all their own stores. They don't take on any debt. Aldi builds stores only as fast as their profits allow - they don't add any more stores than the cash allows."

The Wallingford store is in a strip mall, but Aldi also builds new standalone stores and leases existing space. Each store employs seven to 10 workers, Persohn said.

Haven't heard of Aldi?

In Europe, Aldi Group is one of the largest retail grocery chains. There it sells not only groceries, but also small appliances, computers and wireless phone service, according to Hoovers.com.

Aldi is co-owned by two brothers, Karl and Theo Albrecht. In 1948, the two founders opened their first stores in Essen, Germany.

The brothers, now in their 80s, have a combined net worth of more than $32 billion, $10 billion less than Warren Buffett, the world's second-richest person, according to the Forbes 2006 list of the world's richest people.

With more than 7,500 stores worldwide, Aldi brings in about $35 billion in annual sales. It ventured into the U.S. market in 1976, and now has 700 stores in the Midwest and Northeast. Each year those stores contribute about $5 billion to the company's annual sales, according to Hoover.com.

"In the U.S., their historic appeal has been to people who need to save money," Stern said. "In Germany, they appeal to everybody."

Industry analysts say Aldi may be planning to open 200 stores in the United States in the next three years.

The food market, in general, isn't growing, making competitors search for ways to target specific consumers, Stern said.

"Rather than try to take on those entrenched grocery chains, they nibble around the edges and go after the niches - the markets a traditional grocery chain can't serve," Stern said.

While many stores are courting an upscale clientele, Aldi is targeting the downscale market, Stern said. But its customers don't think they're skimping on quality by shopping at Aldi.

Does the store's selection of frozen entrees and fish fillets look familiar? Does it invoke a deja vu-like response, as if the freezer might have been lifted from a Trader Joe's?

Good guess. Aldi Group owns Trader Joe's grocery stores, which it purchased in 1979. And according to Forbes.com, the company owns an 8 percent stake in Albertsons LLC grocery stores.

Taking a cue from Costco, Aldi Stores also stock some general merchandise items, such as crockpots, digital TVs and the occasional $16.99 children's table and chair set. They appear haphazardly, advertised in the in-store flier, "Next Week @ Aldi."

"They use general merchandise to create traffic in the stores," Stern said. "It's a little bit of like the Costco treasure hunt stuff."

For the past seven or eight years, Aldi has plodded along with just four stores in Connecticut, in Wallingford, Torrington, Waterbury and Bristol. Aldi's competitors include Wal-Mart Stores Inc. and Costco Warehouse Corp.

In their race to woo thrifty consumers, Aldi's strategy is more turtle than hare, although construction of the warehouse is expected to pick up the pace.

"Like Wal-Mart, they build their warehouse first, and then the stores," Stern said.

Zoning for the warehouse has been cleared by South Windsor, Town Manager Matthew Galligan said. Officials there have assembled a tax-abatement package and a plan to improve roads that would lead to the planned distribution center. The town council will be asked to approve those things in March, Galligan said.

Aldi is also in talks with state economic development officials, according to an agency spokesman, James Watson.

A Quarter For A Cart

Need to run to the store for a late-night snack? With Aldi, that's not an option.

Most of its stores are open Monday through Saturday from 9 a.m. to 8 p.m. Only recently have they opened on Sunday for a short seven-hour run, from 10 a.m. to 5 p.m.

"Sometimes it's an inconvenience. We work around the hours," Kristen Torres said. Thus, it's not unusual to drop in on a weekday morning and find the Wallingford store fairly busy.

On a recent Friday morning, some older shoppers and young couples loaded up their carts as they swung through the store's short, six-aisle course.

"The prices are lower than other stores," said Jolnina Szyjko, 70, of Meriden, as she loaded her groceries into the trunk of her car. "I shop here every week."

Like other regulars, Szyjko knows that shopping at Aldi's is BYOB - bring your own bags; otherwise, it costs 10 cents apiece to purchase the store's heavy-duty plastic ones. And customers are expected to bag their own groceries.

Vinny Torres always knows when his wife wants to go shopping at Aldi. She starts fishing in her purse for a quarter.

Like many customers, Kristen Torres did not realize when she first stopped at Aldi's three years ago that the store charges a quarter to rent a shopping cart. (The practice is common in Europe.) The quarter is refunded when the cart is returned. Although it's somewhat inconvenient, it reduces the number of stray carts in the parking lot.

Kristen Torres said it's now second nature for her to check that either she or her husband has a quarter handy. "We usually keep `the' quarter in the ashtray of our car," she said.

Occasionally, however, they come up short.

"People are nice here." Kristen Torres said. "If you forget your quarter, they'll lend you one."

Contact Janice Podsada at jpodsada@courant.com.
Copyright 2007, Hartford Courant