Aldi heads into wealthier areas of US

Aldi heads into wealthier areas of US

 

The German giant and competitors like Lidl and dollar stores have attracted cash-strapped customers. Now they are planning to move into wealthier areas as Americans of all stripes are more budget conscious and their traditional low to middle income groups gets crowded with competitors. Aldi is going even further in appealing to upscale tastes by stocking some graded goods, for instance organic foods. Bernstein Research analyst Alexia Howard is expecting discounters to more than double their average yearly sales growth to 15% between 2015 and 2020, from 6% over the prior five years. She warns, the shopping frequency may not resonate with Americans and it might be even hard to recreate their European success.

Aldi, which already has 1600 outlets in the United States, says the majority of the latest 500 stores it has opened have been in suburban areas where middle income or higher income groups make their living. The organisation takes some preventive measures for cost cutting as well. The quarter deposits prompt shoppers to return carts to the holding bin. Aldi also puts multiple bar codes on its grocery packing so that the cashiers more easily and quickly scan the items purchased and thereby cutting down the need for more staffs to handle customer checkout.

If the customers has to raise a question, they have to drive there; unlike other individual stores they don’t take phone calls as a means of keeping costs down and prices low. The immediate result is that the prices can run 25% to 40% lower than other traditional grocers.

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