Who will win the low-price grocery war, Aldi or Wal-Mart?

Jill Catullo, Roswell, shops for fresh vegetables inside the new Aldi, grocery store, at 600 Mansell Road in Roswell in 2012. JOHNNY CRAWFORD / JCRAWFORD@AJC.COM

If you’re looking for the lowest prices on groceries, industry analysts say you may want to head to the nearest Aldi. And in the next year, you may not have to travel very far to find one.

The German grocery chain is rapidly gaining ground on Wal-Mart in the ever-competitive low-price grocery wars. Aldi’s prices are 21 percent lower than its lowest-priced rivals, including Wal-Mart Stores Inc according to internal studies, said Chief Executive Jason Hart in an exclusive interview with Reuters.

Hart also laid out his strategy saying the company would introduce more private-label (in-house) brands targeting price sensitive customer as well as engage in rapid expansion.

Related: The one thing that will help you save even more money at Aldi

 Locals may have noticed Aldi stores popping up in the metro area. In the last two years, at least five new stores have opened or been approved across North Fulton, DeKalb and Cobb counties.

Aldi’s U.S. sales have doubled in the last five years, said Hart. He told Reuters that the company is spending $1.6 billion on expansion and remodeling of 1,300 U.S. stores and they will open 400 new stores (concentrated in Florida, Texas and both coasts) by end of 2018.

“We are re-merchandising, remodeling, enhancing our product range and are focused on gaining volume so more customers start their shopping at Aldi and we are able to complete their shopping lists moreso than we have in the past,” said Hart.

Aldi will also be ready to respond to rivals with more frequent price adjustments if necessary, he said.

Wal-Mart isn’t taking the challenge lightly. While Wal-Mart retains dominance with 22 percent of the grocery market, sales are only estimated to grow about 2 percent this year compared to Aldi’s 15 percent yearly sales growth.

In response, in February Wal-Mart began running prices tests in 11 states in the midwest and southeast, including in Georgia. In these locations, Wal-Mart has started to close the pricing gap and may in some cases, offer lower prices than Aldi.

The competition is only likely to increase as other retail players, such as Amazon, increasingly try to state a claim in the grocery segment.

As a result, Aldi is making other improvements as well to attract and retain customers. Last year, the company began accepting credit card payments. Previously customers could only pay with cash or debit cards.

And in keeping with the health trends, Aldi has increased its offerings of organic, gluten-free and antibiotic-free foods. Aldi private-label foods are all free added MSG, certified synthetic colors, and partially hydrogenated oils. The grocer’s Simply Nature private-label brand grew more than 50 percent from 2015 to 2016.

Reader Comments 0

4 comments
stevenmia
stevenmia

Aldies rules!!!! Furthermore, where ever there are food deserts, the municipality should work with Aldies or any food retailer who will provide fresh foods...It would not hurt to give a property tax break on the portion of any store that retails fresh fruits and vegetables.  

Another comment
Another comment

The German Brands are great! But it is a European taste! Not American!

FreePolazzo
FreePolazzo

We love Aldi's here in Douglasville.  I like how there are fewer choices when we walk around the store.    The people who work here are upbeat and the place is very clean.  The quality is excellent and I like the simplicity of having only one or two brands to choose from.   Food is food.     Taste can be learned.   Even the fresh Italian bread is better than anything I've seen here in GA.


Walmart always has long lines, no matter how empty the store gets.  The workers are not so happy and neither are the customers.  What a sad place to shop for groceries.  But they do have longer hours and sometimes that is important. 

Jimbo
Jimbo

Sorry but I do rarely shop Aldi as the quality of their merchandised is pretty inferior although I never buy anything from Wal-Mart's bakery as it too, is crap.