Aldi became one of the world’s biggest food retailers using a simple formula of no-frills stores offering a small assortment of products at rock-bottom prices. After decades of expansion in Europe, it followed the same strategy in the U.S., where it gets about $8 billion in annual sales and is growing from 15 percent to 20 percent a year, estimates Jim Hertel, managing partner at food-retail consultant Willard Bishop. Now the low-end discounter is working to also make itself more attractive to a different consumer: the type that shops at Trader Joe’s.
Both supermarket chains are controlled by different factions of Germany’s billionaire Albrecht clan, but there’s more than just a family rivalry at play. Aldi U.S. Chief Executive Officer Jason Hart has seen American shoppers become more concerned about the content and quality of the foods they eat. So his chain recently added organic quinoa and coconut oil, chia seeds, and grass-fed beef. It’s also testing cage-free eggs and sriracha sauce to pull Americans from not only traditional supermarkets, but also specialty chains. Aldi’s own SimplyNature all-natural and organic line has become its fastest-growing brand. Says Hart: “This isn’t your grandmother’s Aldi. … We’re attracting more consumers.”
To read the rest of the story, please go to: Bloomberg Businessweek
