ALDI Joins the Fray
Small and cheap now a west-side option.
by Sally Mitani
You'd think the west side of Ann Arbor had seen all the possible ways to sell groceries--from small produce and ethnic markets to big grocery chains like Kroger, Busch's, and Meijer to upscale health-conscious stores like Whole Foods, Plum Market, and Arbor Farms. It turns out, though, that there was still something new--the small and cheap discount grocery.
Enter ALDI. The German company dates to the 1940s and came to the United States in 1976. With its small stores and limited inventory of mainly house brands, it's so successful on its home turf that it ran Walmart out of Germany a few years ago--the Wall Street Journal reported, with jaw dropped, that Germans preferred ALDI because Walmart was too expensive.
More than a thousand ALDIs operate in twenty-nine states, including fifty in Michigan. Ann Arbor's opened in November on the corner of Maple and Dexter, where Imperial Auto (now on Jackson Plaza) stood. The brand-new building clocks in at 17,000 square feet. By comparison, nearby Plum Market is 28,000 square feet. Despite the limited size and inventory, ALDI covers all the bases--meat, produce, and all categories of canned and dry goods, including paper and soap. The beer and wine section is tiny and you won't find the brands anywhere else, but the price is right--Winking Owl cabernet sauvignon at $2.99 a bottle, anyone? There are even some toys and small appliances.
ALDI does not have the complex, not to say bewildering, array of brands that other stores carry. Tricia Snider, director of operations for Michigan stores, explains: "We don't have sixteen brands of applesauce--we have one. We're going to give you a very high quality in a limited range of items for a very low price." Another way of cutting costs is the elemental product display. ALDI has few shelves; everything is neatly and simply stacked in the packing boxes it arrived in.
Other ALDI eccentricities: you bag your own groceries (supply your own bag or buy a huge
plastic one for a dime), you need a quarter to liberate a grocery cart (refunded if you return it), you pay by cash or debit card only (no checks, no credit cards), and you can't telephone the store--"another way to pass on the savings," Snider says. "We don't have an office." But you can bring back any product you're unsatisfied with, and the store manager will give you a refund as well as a replacement. "Because people don't know some of our labels," Snider says, "quality is important."
In the alternative press, Aldi is reputed to be harshly anti-union--a charge the company denies. But there's no question that part of its cost-cutting strategy is to have as few employees as possible. "Typically we start with ten staff," Snider says. "Sales dictate how many people we can hire."
ALDI was started in the 1940s by brothers Karl and Theo Albrecht--the name is a truncation of "Albrecht Discount." The brothers didn't get along and split the company into ALDI Nord (north) and ALDI Sued (south). ALDI Sued owns all the ALDIs in the United States. Through a family trust, Theo Albrecht owns Trader Joe's, which also is known for its small stores, in-house brands, and low prices. Somewhere at the top of the pyramid, the two ALDIs are still linked, but as a privately owned company, it's allowed to keep a lot of secrets. And it does. Both brothers, in their late eighties and reputedly Germany's richest men, are fanatically private, in a Howard Hughes-kind of way, but the company is still in the family, owned by what has been described as "a complicated series of trusts."
ALDI, 2340 Dexter Rd. No phone. Mon.-Sat. 9 a.m.-8 p.m., Sun. 10 a.m.-6 p.m. www.aldifoods.com.
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[Originally published in January, 2010.]