ALDI has an interesting story as many believe they are part of the same company as Trader Joe’s. While the full story reveals they have some relation, the short answer is they are more like “cousins”. I wanted to profile ALDI to take a step away from tech and look at the lessons of other businesses and what we can learn from them in regards to word of mouth. Here’s how they broke out into the local grocery market.
What is ALDI’s and what do they do?
ALDI is a local grocery and goods store targeted at the consumer with quality products and every day low prices.
What people are saying about ALDI’s
Most people describe ALDI as a no fuss / no-frills budget grocery store. Some are annoyed by the lack of products, the quarter deposit for a shopping cart, the lack of staff available to assist. But the resounding word on the street is of their low prices without sacrificing quality. As with any grocery store, there are products you want to buy there and things you may stay away from.
How ALDI’s got started
For almost 40 years ALDI’s has maintained the same principles “Great quality shouldn’t come at a high price; rather, great quality should come with everyday low prices”.
The brand was founded by the Albrecht’s in Germany in 1961. They have since grown in the US and now have over 1600 stores. They are a simple store with little frills, but they have maintained their promise on always delivering high-quality food.
The Albrecht family wanted to offer a shopping experience that was quick, easy, and inexpensive. And has continued to grow because of it.
How ALDI’s grows through word of mouth with value
(You can see all of our word of mouth drivers)
ALDI wants you to come to the store to get value, to get the most for your money. (Personally, my family saves $30-40 a week if we just get produce from them). So how do they do it? They take away all the frills and are staffed in an efficient way.
The stores are smaller and products are often presented out of the same boxes that came off the truck. They source their own products, so you won’t see barely anything name brand. They have customers self service their own shopping carts (hence the quarter deposit complaint we hear) so they don’t have to pay a high school kid to round up the carts left out in the parking lot. All staff members are generalists who stock and run the checkout.
At their roots, they are the model of efficiency and it shows.
ALDI’s word of mouth rating = 3/5
(see more on our ratings here)
It’s clear that “Value” is their driver but in here in the U.S. I believe ALDI can be quite polarizing. Saving money is a good thing, but if you personally value a nicer looking grocery store and other fringe benefits then ALDI may not be for you.
You have the “saver” where savings is their top concern. They are going to tell all the other savers about ALDI, but if they are around friends who are not savers they may not be as proud to tell their friends.
You have the “fancy” shopper where savings is NOT their top concern. They may talk down about ALDI even exaggerating the minuses to their friends. Ultimately it’s up to their friends to decide whether they want to check it out for themselves but likely comes with a slighted opinion.
Overall Value is a very good driver for word of mouth but in ALDI’s case if you go all the way down the lower cost route you segment who will talk about the business.