Aldi uses self-imposed limitations to keep costs down

By Karl Henkel | October 8, 2011 at 12:00a.m.

BOARDMAN

The Boardman Aldi, which recently moved from 6131 South Ave. to 6600 South Ave., has caught on with local residents such as Marla Denton, 55, of Boardman.

She’s one of hundreds who pass through the eight Mahoning Valley locations, — Youngstown, Austintown, Hermitage, Salem, Boardman, two in Warren and another in New Castle, Pa. — each day.

Denton said she shops at the Germany-based discount chain solely because of prices, which the company says are 50 percent less than in other groceries.

But how does Aldi do it?

Unlike supermarket chains or local grocers, Aldi uses self-imposed limitations to its advantage.

It carries 1,400 of the most commonly purchased items and normally just one brand of any particular item.

“We’re not going to carry three different versions,” said Michael How, group buying director for Aldi Inc. “And since we do that, we need to make sure that [brand] meets or exceeds national-brand equivalent.”

Those brands come at a 50 percent discount for two reasons: 97 percent of the items are carried in all Aldi stores nationwide, and all stores employ the same cost-saving techniques.

Aldi, which has more than 1,100 stores in 31 states, is a BYOB store — bring your own bags — but also offers grocery bags for a small fee. The chain also employs a bring-back-your-cart policy. That is, unless, you don’t mind losing the 25-cent deposit that’s required to take a cart in the first place.

“It’s a little weird at first,” Denton said of the quirks. “But I got used to it.”

Put all these unique money-saving tactics together, and it’s the No. 1 reason the chain has experienced growth every year since 1976.

And then came the economic downturn three years ago, which stimulated growth even more, said Corey Stucker, vice president of Aldi’s Hinckley division.

“We’ve always experienced sales increases, but with the economy, I feel more customers are giving us a try,” he said.

Denton says the store doesn’t fulfill quite all her shopping needs — she still prefers a few name-brand snacks over Aldi’s selections — but estimates she saves $25 a shopping trip.

“I’m saving money,” she said. “So I’m happy.”