CNN profiles 'brutally efficient grocery chain'

CNN published a story May 17 with the headline, “How a cheap, brutally efficient grocery chain is upending America’s supermarkets.” It's easy to guess what retailer the story is about: ALDI.

The CNN story reported on several matters that private label industry insiders already know, one being that ALDI — Store Brands magazine’s 2019 Retailer of the Year — offers more than a 90% assortment of private brands.

“But Aldi has built a cult-like following,” wrote Nathaniel Meyersohn, the CNN Business reporter who authored the story. “When it enters a new town, it’s not uncommon for hundreds of people to turn out for the grand opening. The allure is all in the rock-bottom prices.”

The story also cited the many “quirks” that Batavia, Ill.-based ALDI has become known for: “Shoppers need a quarter to rent a shopping cart. Plastic and paper bags are available only for a fee. And at checkout, cashiers hurry shoppers away, expecting them to bag their own groceries in a separate location away from the cash register.”

The story continually hammers on ALDI’s low-priced model — “The company strips down the shopping experience in an unapologetically and brutally efficient way,” Meyersohn wrote — but does use a quote from a marketing professor stating that ALDI doesn’t leave quality on the table.

“They are able to drive out every fractional cent of cost without compromising on quality,” said Katrijn Gielens, professor of marketing at UNC's Kenan-Flagler Business School.

The story also cited that ALDI is growing its consumer base by offering more products such as organic produce and imported items (pasta from Italy) to attract more high-income consumers.

“On a recent trip to an Aldi in Hackensack, N.J., luxury vehicles, including a $50,000 Jaguar and an $80,000 Tesla Model X, dotted the small parking lot alongside Toyotas, Fords and Hondas,” Meyersohn noted.

Again, there’s not much new in the story that industry insiders don’t already know about ALDI. But consumers who are not familiar with ALDI (and this mainstream story will reach many of them) will no doubt look forward to ALDI coming to their towns (the retailer is in the midst of a major expansion that will make it the nation’s third-largest grocer by 2022) after reading this.

The story concludes with a quote from Mikey Vu, a partner at Bain & Company, a Boston-based consulting firm, who says, “We haven't seen a disrupter in the grocery space like this in a long time.”

And ALDI's disruption is far from over.