Hello, Aldi: Hundreds line up for bargain groceries as stores open in Inland Empire - and soon, in O.C.
Stores openAldi vs. Trader Joe’s prices
Cheese
Aldi: $1.99 (sliced Swiss, 7 oz.)
Trader Joe’s: $3.99 (sliced Swiss, 12 oz)
Grade AA Eggs
Aldi: $1.88
Trader Joe’s: $1.99
1 Gallon Milk
Aldi: $1.92 (skim) $2.12 (1%); $2.25 (2%)
Trader Joe’s: $2.99 (skim, 1%, 2%)
Whole Wheat Bread, 24 oz.
Aldi: $1.69
Trader Joe’s: $2.99
Raw Whole Chicken
Aldi: 95 cents a pound
Trader Joe’s: $1.99 a pound
Cereal
Aldi: $1.19 (Millville Crispy Oats 14 oz.)
Trader Joe’s: $1.99 (Joe’s O’s 15 oz.)
Wine
Aldi: $2.19 (Winking Owl Aldi brand: merlot; chardonnay, Shiraz, white Zinfandel,moscato, Cabernet)
Trader Joe’s: $2.49 (Charles Shaw, all the wine types)
Beer
Aldi: $6.49 for Imperium premium lager
Trader Joe’s: $5.49 for six-pack premium lager
Coffee
Aldi: $4.79 (12 oz. single origin fair trade medium roast, whole bean)
Trader Joe’s: $4.99 (14 oz. medium roast, whole bean)
2-pound bag of apples
Aldi: $2.99 honeycrisp
Trader Joe’s: $2.29 (Fuji)
Trail mix
Aldi: $4.99 to $5.29 (13 oz-15 oz. variety of mixes)
Trader Joe’s: $3.99 (1 pound)
Tortilla chips
Aldi: $1.19 (13 oz., round or restaurant style white chips)
Trader Joe’s: $2.69 (16 oz., yellow corn tortilla)
Compiled by Hannah Madans and Nancy Luna
Beaumont: 1638 East 2nd Street
Fontana: 15080 Summit Avenue
La Quinta: 78-601 Highway 111
Lake Elsinore: 18289 Collier Avenue
Moreno Valley: 12630 Day Street
Palm Springs: 5200 Ramon Road Suite
San Bernardino: 625 E. Hospitality Lane
Yucaipa: 34000 Yucaipa Boulevard
Fountain Valley: 17070 Magnolia St. (opening 4/21)
Buena Park: 8351 La Palma Ave. (opening 4/21)
Anaheim: 275 S. Euclid St. (opening 4/21)
Albrecht Discount was founded by Anna Albrecht in Essen, Germany. Her sons Karl and Theo later took over the company. In 1960, the brothers allegedly had a disagreement about selling cigarettes and split the company. Theo renamed his company Aldi Nord. Karl named his Aldi Sud.
Aldi Nord controls territories north of the Rhine and much of Europe. Aldi Sud controls southern Germany, parts of Europe, the UK and Ireland.
Both companies operate in the United States. Aldi Sud is called Aldi and Aldi Nord is called Trader Joe's.
Cart Complicated?
Will Southern California shoppers take to the grocery cart system at Aldi? To use a cart, shoppers slip a quarter into a slot at the top of the basket, which unlocks it from a rack. After unloading groceries, customers then return the cart to the front of the store to get the quarter back. On Thursday, Aldi stores were giving away free tote bags, and providing quarters for carts.
Sound complicated? In Palm Springs, staffers were at the cart drop-off area assisting confused shoppers.
Inside the new Aldi in Palm Springs, Angela Machicote raised a bone-in ham in the palm of her hand, dangling it in front of her husband’s face like a trophy.
“The ham is $6.20,” she said with glee. As she tossed the 8-pound bundle in the basket, her husband Jose, responded: “You can’t beat that.”
The Machicotes, the No. 2 and 3 customers in line at the Palm Springs store, were among thousands of Inland Empire shoppers who visited California’s first Aldi stores Thursday. Lines wrapped around buildings before each store opened. In Palm Springs, a strong turnout from curious bargain hunters forced Aldi officials to stagger entry into the the small-format market.
Once inside, elbow-to-elbow crowds made a grab for everything from raw chicken drumsticks to gourmet cheese to dog kennels. In San Bernardino, the bag-your-own grocery counter looked more like bumper cars with carts colliding as shoppers negotiated space at the table.
Carmen Tapia, 46, walked out with a frozen pizza and flatbread, opting to cut short her shopping spree in Palm Springs.
“Right now it’s too crowded,” she said.
The frenzy is the result of pent-up anticipation for the international grocery giant, known for its deep discounts and knockoff brands. If it continues, Aldi is expected to trigger upheaval in the crowded Southern California grocery sector.
“Aldi is likely to precipitate the most intense price war that Southern California has ever seen in modern retail history,” grocery strategist Burt P. Flickinger said.
The German-born Aldi, which has family ties to Trader Joe’s, operates 1,500 stores in 32 U.S. states. It sells private label copycats of roughly 1,500 popular name-brand groceries. It claims to save shoppers up to 50 percent off their grocery bills.
Its entrance into Southern California marks the beginning of Aldi’s march West, where it plans to open 45 stores by the end of 2016. The eight stores that debuted Thursday are among 27 opening into July, including three in Orange County. Stores in Fountain Valley, Buena Park and Anaheim are set to open April 21, according to Aldi's website.
Aldi stores are strategically located near competitors – “sometimes within the same retail communities,” Aldi spokeswoman Liz Ruggles said.
In Palm Springs, the market is near the airport in a sprawling shopping center on Ramon Road that includes a Home Depot, Bed Bath & Beyond and Marshalls. Across the street are a Smart & Final Extra and a Walmart Supercenter.
Flickinger, managing director of retail consulting firm Strategic Resource Group in New York, said retailers – from dollar stores to Walmart to conventional markets – should be worried.
“Aldi literally ran Walmart out of the continental Europe because Walmart could not compete,” he said.
In Palm Springs, seasonal resident Karen Cliff said she’ll be skipping trips to Vons and Stater Bros. She was among 130 shoppers waiting to get inside Aldi at 8:30 a.m. Cliff, who shops at Aldi in her home state of Missouri, said first-time Aldi shoppers are in for a treat.
“People who don’t know Aldi, won’t know what hit them,” she said. “You can buy an item on sale at another store with a coupon, and Aldi is still going to be better.”
Cathedral City resident Melinda Shapiro said the prices and variety are excellent.
“It’s like sales prices without the sale,” Shapiro, 67, said.
With that kind of enthusiasm, Flickinger said the Southern California stores have the potential to generate sales of $30 million to $35 million per store, per year. That compares to $12 million to $14 million for Albertsons; $15 million to $16 million at Vons; and $17 million to $18 million at Ralphs.
INSIDE STORES
On Thursday, Aldi workers were eager to help shoppers navigate the no-frills store. The five-aisle layout mirrors most Aldi stores across the country with pantry goods out front and refrigerated goods wrapping the left and back walls.
In California, Aldi officials said stores will have some visual tweaks, including adding more wine and produce, such as cactus and chili peppers.
The simple layout, and limited grocery assortment, are key to overall savings.
Stores are reminiscent of the defunct British-born concept Fresh & Easy with wide aisles and groceries on display atop shipping cartons. Ruggles said the cartons save on labor as no one is spending hours stocking shelves.
“Customers just shop out of the box,” she said. “It’s really easy for consumers to navigate through our stores.”
New shoppers will likely do double-takes as they spot doppelganger versions of their favorite foods and drinks. In the coffee aisle, Aldi sells a “Donut Store Blend” and a “Breakfast Blend” of ground coffee for $3.99 – a clear nod to Dunkin’ Donuts retail products. In the limited beer selection in Palm Springs, a generic green “from Holland” six-pack of premium lager beer is an obvious Heineken knockoff.
David Torres of Cathedral City said the store, at 11,000 square-feet, is a “little small” but the prices are good. He is willing to give the copycat brands a chance, but his 12-year-old son insisted his father buy Kellogg’s Pop-Tarts over Aldi’s “Toaster Tarts,” which were 49 cents less.
“This is a German store. I don’t know if theirs is going to be as good,” the skeptical pre-teen Adrien Torres said.
HOW DO THEY SAVE?
Aldi works with leading food manufactures across the U.S. to create its private label brands sold as Millville, Savoritz, Clancy’s, and Reggano. In many cases, some products are made by the national brand that Aldi is trying to knockoff.
Aldi representatives have repeatedly declined to discuss its manufacturing process, including how they manage to get the recipes so close to the real product.
Ruggles did say Aldi has a razor sharp focus on quality. They have a team of chefs who work every day performing “blind taste tests” to ensure Aldi products stand up to their national brand equivalent. The company stands by its knockoffs and offers a “double guarantee,” which replaces the product and refunds the customer’s money if they’re not completely satisfied.
Grocery analyst Craig Rosenblum said Aldi’s private label quality and operational efficiencies are key to its success. “It’s more efficient without sacrificing quality.”
Though 90 percent to 95 percent of store products are Aldi labels, some familiar brands are stocked in the store. The Palm Springs store included Coca-Cola products (Coke, Diet Coke and Sprite), Red Bull, Arizona Green Tea, Kool-Aid, Kellogg’s Pop-Tarts, General Mills Honey Nut Cheerios, Old Spice and POM juice. Many brand-name Hispanic products were also in stores, including Jarritos soft drinks.
“I’m really surprised they have some Puerto Rican products,” said Jose Machicote, 64, of Palm Springs.
Often, iconic brands sit next to their Aldi lookalike on the shelf. For example, a $2.48 blue box of frosted strawberry Pop-Tarts sat next to the $1.99 “Toaster Tops.” Everything from the blue box to the font and imagery looks like the Kellogg’s version. Millville Honey Nut Crispy Oats are in cartons next to Honey Nut Cheerios of the same size. Aldi’s version is $1.19, while the General Mills box is $2.89.
Though Aldi is vastly different than its Trader Joe’s cousin, it does share one similar strategy: exclusive products.
Aldi’s version of a Two Buck Chuck (its cheaper wine) is the Winking Owl. The $2.19 wine comes in chardonnay, Shiraz, white Zinfandel, moscato, Cabernet Sauvignon varietals.
Aldi also has a line of premium products sold under the label “Specially Selected.” It includes a line of gourmet cheese, pita chips, fruits spreads, sourdough bread, coffee and chocolate bars.
WHO SHOPS AT ALDI?
Lance Gonzalez of Riverside was at the San Bernardino store with his wife and family. They bought a little of everything, spending $109, about $50 less than a typical grocery store visit.
Bread and dressing, he said, was half the price of what they normally buy. Produce was 25 percent less, milk and cheese was $1 less.
“We’ll definitely be back,” he said.
In California, Flickinger said Aldi will appeal to a large demographic. With the high cost of living, most everyone looks to save money through their grocery list, he said. That includes everyone from families to renters, to senior citizens.
But the real danger for Aldi rivals? Millennials – the next generation of shoppers.
“Millennials are the first generation where price is more important than brand,” he said.
Even those who don’t need to save will be lured.
“Rich people love a bargain,” he said
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