How Two German-Owned Sister Supermarket Brands Became Hot Trendsetters in the U.S.

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No matter their small selections and the near absence of brands you’d recognize: Trader Joe’s and Aldi are winning top honors in consumer surveys and proving to be enormously influential in the supermarket business.

A new study from Market Force Information asked 6,600 American consumers to name their favorite supermarkets in terms of categories like convenience, price, quality of meat and produce, courteous staff and variety of merchandise. The contenders included all the big names in supersize grocery chains, including Safeway, Giant Food, Stop & Shop, Publix, Whole Foods and Walmart, but the overall favorite store named by consumers was a small retailer with a neighborhood-market feel and very few national brands: Trader Joe’s.

“When asked to rate their satisfaction with their most recent grocery-store experience and their likelihood to refer that grocer, consumers scored Trader Joe’s above all others,” the study states. “Publix, Whole Foods, Wegmans and Aldi also ranked high” with consumers. Walmart, on the other hand, ranked at the very bottom of Market Force’s “customer-delight index,” which combines shoppers’ overall satisfaction with the likelihood they’d recommend the grocer to others.

(MORE: A Disloyalty Movement: Supermarkets and Customers Drop Loyalty-Card Programs)

Trader Joe’s received top ranking in the survey categories for inviting atmosphere and fast checkout, and it also scored high for having a courteous staff, cleanliness, accurate pricing, nutritional information, natural and organic options, and overall merchandise selection. In a discussion at Retail Wire about why Trader Joe’s came out on top in the survey, one retail expert commented:

Trader Joe’s secret is not just about accurate pricing and fast checkout. It really comes down to the small formats, well-edited assortments and value pricing of unique private-brand products. Not all that different from what drives TJ’s sister company Aldi, when you think about it.

Speaking of Aldi, which along with Trader Joe’s is owned by Germany’s Albrecht family, consumers named it as the top-ranked grocer for low prices in the poll. Both Aldi and Trader Joe’s may be small in terms of the physical sizes of their stores, but they obviously please their customers — and they seem to be proving themselves as big trendsetters in the supermarket business.

(MORE: Germany Has Become the Cut-Rate Prostitution Capital of the World)

Both sister supermarkets have been expanding rapidly in recent years. Aldi, for instance, opened nine stores in Houston last spring, and in a recent press release announcing a major expansion to Southern California, the company noted it’s been adding an average of 80 new stores every year. Aldi’s business model is based on low prices, which it achieves by practices such as stocking fewer items, eschewing national brands for cheaper generic labels and not accepting credit cards. Unlike other discount stores, however, Aldi locations are exceptionally clean and well organized — so the shopping experience doesn’t come off as second rate.

“They try to be the lowest price in the market,” BB&T Capital Markets analyst Andrew P. Wolf said, describing Aldi to the Los Angeles Times. “If you took a Trader Joe’s and made it more for Walmart customers, that’s what Aldi is, like a dollar store for food.”

As a 2010 Fortune story on Trader Joe’s pointed out, many Trader Joe’s trademarks have become major trends throughout the grocery field. Think: good selections of organic and natural products, a constantly changing roster of tempting “affordable luxury” goods and loads of in-house (generic) store brands.

Aldi appears to be worthy of copying as well. Transplanting a retail brand that’s successful overseas into the U.S. is not easy. Tesco, Britain’s largest grocery company, failed in spectacular fashion when it tried to launch the Fresh & Easy brand throughout the western U.S. Aldi, on the other hand, which has won the U.K.’s Best Supermarket award, sponsored by the consumer watchdog Which? Group, two years in a row, has been enjoying success in the U.S. to the extent that other foreign grocers now plan on following in its footsteps.

(MORE: Tale of Two Supermarkets: Why Fresh & Easy Flopped and Fairway Flies High)

Lidl, a German-based discount grocery chain with 10,000 stores in Europe, is likely to expand into the U.S. market by 2015, according to Supermarket News. Matthias Queck, a retail consultant for London’s Planet Retail, reported that Lidl executives have been exploring a shift to the U.S., that the decision to expand has probably already been made, and that the company will use a “copycat” strategy in the U.S., patterning its growth on what Aldi has done. “The retailer would take a similar path to Aldi, locating first in strip shopping centers nearby larger retailers, before pursuing stand-alone boxes and stores offering additional brands and services,” Supermarket News reported. Queck “said its U.S. strategy would be ‘Aldi-plus and see what happens.’”

27 comments
EverNotMe
EverNotMe

trders market is a american brand. just the owner is german wich does not mean traders market has anything to do with germany. aldi on the other hand got realy popular in germany and expanded to other states and continents.

ChesterRico
ChesterRico

"Aldi locations are exceptionally clean and well organized..."

This is a joke right? Aldi stores in Germany are dirty (bordering on disgusting), funky, disorganized and understaffed/staffed by badly trained folks.

sictransit5
sictransit5

Aldi is great for what they offer - produce especially. When the price of a fresh item is really high, they just won't have it. And though TJ's is 80 miles away, we stop and stock up whenever we're in the area. They disappointed me when they cut the Sicilian Caponata - I haven't forgiven them yet. However, if you're a Couponer, you can't beat Publix - hands down winner. My wife pays 25-35¢ on the $ with her weekly staples shopping.

We shop at Lidl in Sicily; a big one in Palermo and an Aldi-like one in Alcamo. If they come here, they won't have my mainstays anyway, whiskeys and liquors for €5 - 7 for .70L, and German beer for €0.44 for 20 oz. bottles. Oddly, all the labels on their brands in stores in Sicily are in both German and English - nothing is in Italian!

MaEvenBeMe
MaEvenBeMe

I lived in CA most of my life, and have to agree with this article 100%.  Despite it's ad campaign, WalMart vegetables are not nearly as nice as any competition, and their meat prices are comparable with Kroger's and the quality is not as good.  Aldi's has a large range of spices and mixes that are out of this world, specifically in their Asian goods.  Their fruit is better than WalMarts.  Their mead?  Not so good.  However, their canned goods and sundries are delicious and much less expensive than all the rest.  I save enough there that I can afford the meat market.  Trader Joe's is a fantastic store, full of good healthy things to eat and drink.  Their wine selection is surprisingly eclectic, as is Aldi's which has some really wonderful traditional German wines, lke Reislings and Liebfraumilchs.  Enjoy!

ronwarp
ronwarp

I discovered the Aldi store here in South Miami and really enjoy the selection and especially the very good prices.  It is not a place that carries the major brands that most people have been 'programmed' to accept.  But, the selection options that replace these popular brands are very good and in most cases superior to what we are used to purchasing for food.  Bagging my own groceries is not a big deal....I have done it in other stores when they were short-handed and the cashier was overworked. The fact that the store uses the shipping boxes as their way to present the products seems like a smart thing as it saves the cost of shelving and probably takes less time to restock the store each day.  Overall, I have found Aldi to be a very good value and with interesting and tasty European (Especially German) foods that are delicious.  And as one reader pointed out, the lack of GMOs in the foods sourced from Europe really is a good feature.   Not taking credit cards (they do take debit cards....smarter than using credit!) is a smart move....credit card companies have been ripping off consumers and businesses alike with their high fees for the use of plastic.  I think when more Americans discover Aldi they will make the move to purchase more of their foods there instead of the bigger stores where money doesn't go as far.  Way to Go, Aldi!

davidhoffman
davidhoffman

We got some Aldi stores in central Georgia, USA about a year ago. It took a while for people to remember the quarter to use the shopping carts.  I have found many of the dry boxed and conned goods to be equal to the Kroger brands available nearby.  I try to use the Aldi reusable shopping bags that I purchased. They recently changed to a lousy plastic bag from the nice one they use to have for sale.  Bagging up your own groceries is similar to the experience many people have at the Sam's Club in Macon, Georgia. It is not that big of a problem. There was a commenter who mentioned the limited selection of fresh meat, but I have found it adequate in taste and texture for low cost meals. The biggest problem is in the area of fresh produce. You have to pick carefully as much of it is probably a couple of days older than what you might find at Kroger or Publix. 

As for customer demographics, our Aldi is located near several motels and hotels. Those establishments are close to a technology park. The store provides an easy way for visitors to get basic food staples by walking to the store. It also provides an easy way for the businesses in the nearby technology park to pick up basic food for office functions. Thus the Aldi has everyone from high income tech workers to low wage office clerks going to a nearby small grocery store for basic food. It provides an easy walkable solution for out of town visitors to restock hotel or motel mini-fridges with food that is less costly than eating out. There is a much larger Kroger withing a half mile of the Aldi, but it is crowded and not easy to get to by walking from those same hotels, motels, and tech park offices.

renfieldc
renfieldc

ALDI is the best thing that's happened for Australian shoppers. It seems, from a stuttering start, no doubt because of the reluctance of suppliers to a 'new' upstart, we now have best brands available.

shapiro.len
shapiro.len

shopping in Aldi in Brooklyn,ny, was not any fun at all. You cannot buy anything that says,Kelloggs,Dole,Hunts,DelMonte,Ragu,or any other brand name Americans have found to be tried and true for decades.

Aldi is a nameless and faceless place,with no name brands, sort of like a face with no nose, no lips, no chin. Just an anonymous supply of one choice items- don't look for salt free,low sodium, reduced sugar, low fat,etc. There are some but not many.

Also,products are stored in cartons,giving feel and appearance of a warehouse handing out free food to the poor and starving. You cannot charge anything.Only cash and debit cards.

This is the result of the sinking of the American middle class into the lower classes. Americans need to eat, no matter how lousy the food is. Forget quality, this is bare bones shopping,where people who have lost jobs, haven't gotten a raise in years, lost 20% of their pay to sequestration, living on charity,food stamps(accepted by Aldi), unemployment checks,welfare.   Just not making a living anymore,thanks to Clinton,Bush,Obama and all their lies,wars, failures, pro top 1% policies for American billionaires and millionaires.

No bankers and brokers in jail for swindling us out of our homes, corporations with untaxed billions off-shore, wage slave jobs in China,India,Bangladesh,etc. paying big profits and destroying unions and living wage jobs in America.

So we now have trader Joe,Aldi,WinnCo,Walmart etc. as America sinks down into the ground while hi-rise luxury buildings rise everywhere, mansions, estates,etc. multiply, the Versailles Palace syndrome of Louis XIV.

America the ugly, the global economy at its worst,and the end of freedom,democracy,equality of opportunity etc for the American people.

Obama turned out to be whiter than white. A phony,lieing politician like all the rest.

The era of George w. Bush and co.

SukeMadiq
SukeMadiq

Trader Joes sucks hard.  Their often poor store brands cost as much as superior name brands.

mahadragon
mahadragon

I guess depends on where you live. In my neck of the woods, in South King County I would rate Trader Joe's, QFC, and Top Foods in no particular order in terms of convenience, quality of meats and produce, friendliness of staff, price and all those other factors. They are all close to me and offer competitive prices for the most part.

QFC has the best sandwich meats in Boar's head although it's a bit pricey.  Their artisan breads are a great value when purchased in the day old basket. They also started carrying Top Pot donuts. I also like their hot soup section which is very good. Their fruits and veggies are a good quality and a bit higher than competitors. 

Trader Joe's has good salads. I always get the one with spinach, raspberries, vinaigrette, and blue cheese. Their frozen food section is very good with mushroom fettucini and Linguini Mushroom Pasta Sugo. Two buck chuck's value is tough to beat, I like the Merlot.

Top Foods has the freshest dairy section in the history of mankind. Every time I buy milk from them, it has an expiration date that is generally close to 2 months later. I have a half gallon of milk that I bought over a month ago in my fridge that isn't set to expire until Aug 16. Try that with your neighborhood supermarket, hah! Too bad the Top Foods in my neighborhood closed down. Before it closed, I managed to snake a head of organic lettuce before the door shuttered for good. It was one of the freshest, best heads of lettuce I ever had. Put it this way, it had me driving to another city for my next lettuce and milk purchase.

KennethGallaher
KennethGallaher

Aldi's sometimes has great deals.  Better German and other Euro chocolate and things like currant jam and marinated artichokes.

SahasranshuPanda
SahasranshuPanda

It's the damn chocolates! 9 out of 10 survey takers were thinking of the chocolates when they were asked to rate Trader Joe's...

cjh2nd
cjh2nd

love trader joe's, couldn't pay me to shop at aldi. their food is incredibly low quality. not for me.

CoolBeanzIA
CoolBeanzIA

I use both and always have a good experience with service and quality.  Many of my friends snub their noses in the air about shopping at Aldi's but I go for value, not name brand snobbery.

EverNotMe
EverNotMe

@ChesterRico ich glaube für die ammis wirkt unser dreckiger aldi immer noch sauberer. Auch ist das in De unterschiedlich der aldi in der nähe wo ich aufgewachsen bin war auch sau dreckig (räumlichkeiten von aldi nur angemietet) vor 5 jahren sind die da raus und der neubau ist akurat sauber(gehört aldi). rest kann ma sich denken...

AngelaBirch
AngelaBirch

@shapiro.len OK you don't like Aldi, don't shop there. I actually prefer the brands they have  I find many to be of higher quality than US brands, less sugar less corn syrup.   Actually read the labels you will find most are already low salt, reduced sugar. No they don't write it all over the labels.  If you are unwilling to experiment, try something new but insist on only the  basic US brands you will be happier with the offerings at a bland US grocery store.

Are you really stupid enough to buy food with a credit card, pay interest on your food??  WOW!!

As for the stores you mention, yes they are different than the ever bland grocery store.   I don't shop at Walmart don't like their employee treatment. But  Trader Joes, fantastic, you can buy interesting things there you can't find anywhere else. Exotic salad, imported cheeses you literally can't find anywhere else outside of their home country. Lots of Greek, Spanish, Italian French food imported from their home countries  Beers from all over the world,  wines also, artisan breads with herbs in them.  I don't know if they take credit cards, I don't charge food.

Winco also sort of falls into the quirky food category  I can buy locally bought wild salmon  for $10 per pound. It is fresher than any other store has, they buy it locally from local fisherman and were always caught overnight.  At the end of the day they donate it to charity kitchens if there is any left. Their meat selection is wide ranging not just things like rib eye and   Half pigs for BBQ but  massive selections of  cuts both ethnic and unusual.  IT is the only place within 40 miles where I can buy british sausages and Imported Scottish oats.  OH, and they pay their employees fantastically a checker who is a part owner of the store ( it is owned by the employees) makes about $90,000 per year. It sells name brands  but what I love are the things you can't find in other grocery stores. Not the Ragu and  Dole. but the more interesting brands

Now for your sinking into the pit theory  Every store in the US takes food stamps from the High dollar exclusive delis to Costco, to  every chains store out there,  Yes even the poor have to eat

I have no idea how young you are but you sound about 17. I am 64, own a business  and I love to shop at interesting stores with unusual products.  Trader Joe is hardly new, I shopped at it when I was going to college in the early 1970s.  The food isn't especially cheap but it is tasty and interesting.

I discovered Aldi when opening a branch of my business in Denmark, not a poor country filed with poor people.

It has nothing to do with any president of either party. It has nothing to do with what houses the wealthy build ( there has always been wealthy  and the less wealthy.( Most of us well off are well off because we are not stupid enough to charge and pay interest on food. We don't waste our money  spending on brands famous for being brands we prefer quality

As for Obama, sweetie how gullible were and are you?  He never made a secret of the fact he was half white and half black, and did you really expect any president to solve all problems while walking on water and turning it into wine???  The president has no power to do many of the things you seem to think a president can do? Should have stayed awake in civics. He can't pass laws, prosecute someone for a crime that was not a crime when it was committed. Yes we live in a world economy, you can make it work for you or work against you. The US has never had equality of opportunity.  Ever hear of slavery? Jim Crow? Our treatment of Native Americans?   If you vote you still have democracy, if not you don't that is how it works.

renegade.rivers
renegade.rivers

@shapiro.len What you seem to fail to realize is just how many of the brand names you mentioned use many ingredients that are not only unnecessary, but also dangerous to one's health.  While many of the the brands sold by Aldis may not be household names in the US, they are, however, common names in Germany and other parts of Europe.  These brands are much safer for consumption than those "tried and true" brands you mentioned, because they do not contain GMOs which are banned in many parts of Europe.  In contrast, most of the named brands you mentioned use GMOs in 99% of their products.  Personally, I don't care what the brand name is, just as long as the food that brand sells is healthy and doesn't contain GMOs and the many other cancer causing additives that are used in the majority of food products made in the United States.  If on the other hand, you believe that "brand named, tried and true" foods are what you want, then go to where you can find them, and pay that extra dollar for them, and eat all of those cancer causing ingredients.   

truth2013
truth2013

@shapiro.len "Obama turned out to be whiter than white."  Looks like you are a fine racist...

shapiro.len
shapiro.len

@SukeMadiq absolutely true. that's why they stay out of middle class areas,and compete with Whole Foods,whose prices make trader Joe look like a discount store.

trader Joe give bags away for free, while Aldi sells them. They also accept credit cards while Aldi does not.Look at the customers- yuppies who come from rich families, have graduate degrees, go to the Hamptons on weekends in Audis,stay single forever,and sponge off their families as much as they can.

Trader Joe looks like luxury compared to Aldi of the same parent CO. aLDI,IN SOUTH Brooklyn,is a warehouse masquerading as a supermarket. Shelves with cut out boxes holding everything, buy your own bags, 11 cents for plastic,6 cents for paper. No credit cards but food stamps ok. almost no fresh meat  and poultry,frozen foods galore with no name brands. Looking for Lean Cuisine- HAH!

KMB213
KMB213

@cjh2nd Do you realize that a lot of Trader Joe's and Aldi foods are the exact same thing, made and packaged in the same building, with different labels?

KMB213
KMB213

@AngelaBirch @shapiro.len Thank you for bringing up the fact that the vast majority of grocery stores take food stamps, including fancy/expensive ones like Whole Foods. A lot of stands at Farmer's Markets also take them. I don't think any reasonable person would suggest that anything sold by Ragu is higher quality than fresh veggies and grass-fed beef one can get at a Farmer's Market.

One (small) point of contention. Though I shop at Aldi's occasionally, it does annoy me that they don't take credit cards. It's entirely possible to put food (or anything else) on a credit card and not pay interest on it if you pay it off. Personally, I like to get points for free flights, so I put almost everything on a credit card, but pay it off each month.

shapiro.len
shapiro.len

@AngelaBirch @shapiro.len 

obviously, you are part of the problem, the 21st century form of oligarchy, plutocracy and economic fascism.Obama is a hypocrite and a liar. The liberal establishment has condemned him,along with the infamous traitor,bill Clinton. Unemployed americans by the millions hopelessly look for jobs, living in shelters,cars that go nowhere, empty foreclosed former homes.

It is widely known and recognized that the American middle class is disappearing. Millions foreclosed,millions in bankruptcy,millions in debt  from college loans and medical bills, while the one percenters have never done better.

Americans have been betrayed by both parties,who are the running dogs of the D.C. lobbyists and people like you.You are a disgrace to the founding fathers, and the blood shed by americans who fought for this land.you should crawl under a rock and pull your despicable self into the bottomless pit you have helped to create. America has become a stooge for the greedy and ruthless charlatans world over. As a fellow aristocrat of yours once said, No Bread?  Let them eat Aldi!

KMB213
KMB213

@shapiro.len @SukeMadiq Trader Joe's also relies on a huge frozen food section. The one near me has significantly less produce than the nearest Aldi's, as well. Lean Cuisine is horrible for you and full of additives and tons of sodium, so I'm not sure not carrying it is some great loss.


Addtionally, you realize that the vast majority of grocery stores, including high end ones like Whole Foods, accept food stamps, right?

shapiro.len
shapiro.len

@KMB213 @shapiro.len @SukeMadiq 

food stamps in Whole Foods is like rowing from Tokyo to Honolulu with a broken paddle.

the only poor people in Whole Foods are washing the floors and tables for minimum wage. If we had a meritocracy, Whole Foods wouldn't exist.