An interesting article in The Wall Street Journal today about the Aldi supermarket chain and the impact of the low cost retailer on British food retailers pointed out that the chain is expanding in the U.S. It's surprising however, that there is no mention that Aldi’s owner, Germany’s Albrecht family, has already established quite a presence in the U.S. with another retail banner, Trader Joe’s, which has over 400 locations.
It is almost certain that every food retailer in the United States knows about Trader Joe’s, with its extensive private label assortment and “treasure hunt” atmosphere that Millennials, senior citizens and almost everyone in between seems to find appealing. It is a limited assortment supermarket, in many ways similar to the Aldi stores in the U.S., but with a significantly more upscale product mix although similarly targeted to budget conscious consumers. Those consumers' shopping carts probably look much different, however, with the one at Aldi likely containing a gallon of milk priced lower than any other supermarket chain in the area, and the Trader Joe’s cart perhaps including a Crème Bruele frozen dessert that costs just a fraction of what the upscale restaurant down the street might charge.
The main point here is that the owners of both chains are really attacking the U.S. market on two very different fronts but with the same philosophy – give consumers a very no frills shopping experience where they leave feeling they have received good value and are not discouraged by the lack of choice as result.
The Wall Street Journal is correct in noting that U.S. food retailers are keeping an eye out for Aldi’s next move. But they should remember to look both ways, as Trader Joe’s could be coming in the other direction.
It's certainly not over, but farmers and food producers may receive a few months' respite as tariffs in the Sino-U.S. trade war will not escalate for 90 days. Additionally, they can at least look forward to a new normal as the United States-Mexico-Canada Agreement (USMCA) moves forward to full ratification.read more
Brian became president of The Food Institute in 2002 and has worked for this non-profit, founded in 1928, since 1980. Brian has been interviewed on consumer and food industry trends on a number of television programs, including Fox News, The Today Show, NBC News, the CBS Evening News and the PBS Nightly Business Report, and quoted in publications ranging from The Wall Street Journal and New York Times to Supermarket News, Progressive Grocer and Food Processing magazine. He has also been a frequent guest on various Public radio programs discussing food prices, mergers & acquisitions, and other industry issues.
Brian graduated from Ramapo College in Mahwah, NJ with a B.A. in Political Science and also holds a Masters in Administrative Science from Fairleigh Dickinson University.
There are no comments, yet. Why don't you add one?
10 Mountainview Road
Upper Saddle River, NJ 07458
Food Institute reps are available to answer your questions
BECOME A MEMBER
For close to 90 years, The Food Institute has been the best "single source" for food industry executives, delivering actionable information daily via email updates, weekly through The Food Institute Report and via a comprehensive web research library. Our information gathering method is not just a "keyword search."