How Aldi is taking on US supermarkets with its $4 almond butter
For some city commuters, the new city location offers a better experience than older formats. Kelvin Dozier, who usually shops at an Aldi in Brooklyn, recently started visiting the Manhattan location right across the street from his office for convenience.
“This one is brighter,” Dozier told the BBC, noting the fresh, sweet-navel oranges in his basket. “The one in Brooklyn is a little bit smaller. It almost seems temporary, but here it looks like a permanent place.”
Still, winning the support of city snobs accustomed to premium brands remains an uphill battle. Visiting Aldi for the first time, Ralph Montenegro remained fiercely loyal to his competitors.
Praising the prices of basic food items such as flour and fruit, Karadağ said, “It has more variety than Target,” but stated that he still preferred Trader Joe’s. He added that Aldi’s heavy reliance on packaged, private-label processed foods is a disadvantage compared to the natural organic options he favors.
It’s this strict adherence to limited, exclusive labels that keeps Aldi’s overhead costs low, according to Dustin York, an associate professor of communications at Maryville University.
He says Aldi is aiming for a lean, high-efficiency model that delivers about 80% of what a traditional department store retailer carries, but at a much lower cost.
Still, York argues that Aldi is unlikely to take dramatic market share from Walmart because the retail giant is so large. “I call Walmart a battleship and I call Aldi a kind of submarine.”
But navigating these crowded waters can pose distinct financial danger.
“Their biggest kryptonite is the cost of real estate,” York cautioned, pointing to the cutthroat Manhattan retail environment where average rents run between $350 and $700 per square foot.
