Walmart has marketed itself as the low-price leader ever since the late Sam Walton founded it in 1962. But don't tell that to Aldi. The German retailer, which has doubled its U.S. presence over the past decade, has Walmart on its heels in the grocery business.
Aldi's prices are roughly 35 percent to 40 percent below what a typical supermarket charges, while Walmart's prices are about 13 percent to 15 percent below the traditional chains, according to Jim Hertel of WillardBishop, a consultancy to the food retailing business. Howard Davidowitz, the head of retail consultancy and investment bank Davidowitz & Associates, goes further, estimating that Aldi's prices are about 30 percent lower than Walmart's.
The secret of Aldi's success lies in its no-frills business model, which requires customers to bag their orders and charges them a 25 cent deposit to use a shopping cart. The stores carry about 2,500 items, less than 10 percent of the 40,000 to 50,000 assortment found at most grocers. At Aldi, merchandise is sometimes displayed in the boxes in which they were delivered.
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