The Tradeoffs We Make at Trendy Discount Grocers Like Aldi

More stores are serving up high-quality food at bargain prices.

Athens, Georgia, USA - May 8, 2012:Aldi Food Marketis a German-based discount supermarket chain which currently operates more than 1,150 stores in the U.S. and about 8,133 worldwide.
(Image credit: SeanPavonePhoto)

Shoppers often face a conundrum: Should they pay more for fresh, top-quality groceries or opt for low prices and no-name brands? Now, discount grocery chains aim to deliver both quality and value.

Look for bargains on fresh produce, organics and healthier foods free from artificial ingredients—goods previously seen as reserved for high spenders—at a growing number of discounters, including Aldi, the soon-to-be-opened U.S. branch of Germany’s Lidl chain and Whole Foods’ budget offshoot, 365 by Whole Foods Market.

Aldi, which plans to have nearly 2,000 U.S. stores by 2018, undercuts ordinary supermarket prices by 35% to 40%. The trade-off for a discounter’s low prices is typically smaller stores and fewer employees to help out. If you covet Kellogg’s cereal or Chobani yogurt, you may be out of luck—many products will be the store’s brand. (The quality of private-label foods is generally similar to national brands; they may be produced by the same manufacturers.) You’ll find staples, but a limited variety

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of each.

Lidl plans to open locations along the East Coast by 2018. It will have larger stores than discount competitors, will likely offer a mix of national and private brands—and it could start a price war. “When Lidl enters a market, it makes a splash by undercutting the price leaders,” says Mike Paglia, director of retail insights at Kantar Retail.

Miriam Cross
Associate Editor, Kiplinger's Personal Finance
Miriam lived in Toronto, Canada, before joining Kiplinger's Personal Finance in November 2012. Prior to that, she freelanced as a fact-checker for several Canadian publications, including Reader's Digest Canada, Style at Home and Air Canada's enRoute. She received a BA from the University of Toronto with a major in English literature and completed a certificate in Magazine and Web Publishing at Ryerson University.