Smart Buying

The Tradeoffs We Make at Trendy Discount Grocers Like Aldi

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

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 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.

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