Why Aldi Still Make Profit Selling Cheap

Unlike Walmart which is a public company, Aldi is a private company which has been successful over the years, from opening stores in countries like Germany, Australia, Europe and the United states. In 2019, Aldi planned a sum of $5.3 billion dollars to increase the number of stores which the intention of growing 800 stores in 4 years. With the company currently having over 1600 stores in the United States.

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History

Formerly owned by two brothers, the store was founded in Germany after the World War II in 1946, the store formerly known as Albrecht, the store aimed to give customers an affordable shopping experience. The store name was later changed to ALDI which is believed to be a short form for the word Albrecht Discount. In a family business, there is always a possibility of a split in business but for Aldi, cigarette was the cause of the split. The company splitted in the early 1960 into Aldi Sud and Aldi Nord. The two companies have different logos and they exist separately. Aldi Sud is in the United States while Aldi Nord is in France. Aldi Nord also is in the United State but not with the Name Aldi since Aldi Sud got the name already. So instead of the name Aldi, it uses the name Trader Joe’s.

How Aldi Sell Cheap and Profitable

The supermarket/ superstore is very successful because of one thing, cutting cost. This company uses a lot of things to cut cost and the goal is to get people to buy goods at the least affordable price. So how does this company do this things without going bankrupt?

• Aldi sell substitute brand
  When I say substitute brands I do not mean substantial brands but instead of getting a popular brand at an Aldi store, you will be seeing non popular brands. This brands are cheaper compared to the major brands sold in other stores. They are not said to be inferior as people have given them a thumbs up for their products.

• Bulk Buy with Limited Selection
  You will not see different brands of the same product, rather you will see more bulk goods from one brand. With this, the company is able to save money and give customer one choice which can’t be seen somewhere else except an Aldi store. This keeps customers key to the store.

• Location Size
  Unlike Walmart and other big stores, Aldi usually go for a small store which helps them save money for rent. A typical Aldi store is 16,400 sq. ft while a typical Walmart is about 105,000 sq. ft. The store opens from 7:00 AM to 7:00 PM and do not pay workers overtime as they do not do it. The company doesn’t pay for overnight electrical bills and other utilities.

• Aldi do not give free bags
  If you are going to shop at Aldi, it is advisable to come with your bag or you buy their bags. With this, the company do not incur the cost of giving free bags making it possible to cover the cost of selling cheap.

• You push your cart to the park
  Unlike other stores where people are paid to arrange shopping cart, at Aldi, the shopper arranges the cart themselves as they are given a cart quarter which they will continually use whenever they are shopping at an Aldi store.

It is no surprise that they are able to make profit even when selling cheap. If you are going to sell cheap, you are either going to sell inferior goods or you cut expenses and Aldi is going with the later.