ALDI, but goodie?

If you listen to the radio at all, you've probably heard commercials for the newest kid on the block in the Texas grocery market, Germany's ALDI neighborhood stores.  Having lived in Europe in the early '70s, I had fond memories of the smaller, easily accessible stores in our village.

Now, why anyone would want to get into the fray of the grocery industry in Texas is beyond me.  Do the names A&P, Skaggs, Safeway (maybe a so-so example, considering Tom Thumb), Winn-Dixie, Food Lion, Albertson's (many store closings), and Minyard's (way down in size) ring a bell?  The next nearest industry that I can think of with so much carnage would be consumer electronics (Highland Appliance, Incredible Universe, McDuff's, Circuit City, Electric Avenue, Tweeter, Radio Shack).  What?  Radio Shack is still alive?  Sure, but irrelevant.

The premise of the ALDI store is to offer a neighborhood feel, with a limited number of SKUs and no-frills (no coupons or credit cards accepted, pay for or bring your own bags, pay a deposit to use a shopping cart), at a steep discount.  Since there's an ALDI store between my office and home, I've stopped a couple of times to grab a few items.  Here's my latest list:

• Pork Rinds (Hot) - $1.19     A fair deal (actually, any price on pork rinds is fair, as eating them is a near-religious experience.)
• Beef Flavor Rice Mix  - $0.59    Who knows?   I rarely buy this stuff.
• Condensed Vegetable Soup  -  $0.49    Quite a bit cheaper than Campbell's or Kroger store brand.
• Shep Premium Chicken Cuts canned Dog Food -  $0.55    Cheaper than Alpo, or Ol' Roy (dog didn't complain - and the melamine content was not disclosed.)
• 24 count Green Tea with Lemon & Ginseng  -  $1.19   Cheaper than Celestial or Lipton, even Kroger house brand or Target's Archer Farms, but probably could've done as well at DolGen or similar.
• Blueberry Toaster Tarts, 12 count  -  $1.79    About the same as Kroger or Great Value brands.

Total tab: $5.85.  I probably saved a buck or two, but here's the interesting part: I went in hoping to buy some cereal, as most of their boxed cereals are about $1.65 - didn't find what I wanted (whole flakes with strawberries or blueberries).  Had I been at Kroger, however, I'd have gone in expecting to spend about $5, and would have, almost inevitably, come out having spent $20.  So clearly, ALDI does not appear to be as adept as Kroger at leveraging dollars out of my wallet.

There is another blogger who can probably give a more detailed analysis of the grocery industry and  ALDI concept and how it will play out, but suffice it to say that if you're in commercial real estate brokerage, start cultivating clients who need approximately 20,000 ft² of retail space in multiple locations - I predict there'll be several available properties in a year or so.