When you first see the prices at Aldi, you might think that they're too good to be true. How is a grocery store able to sell food at such a low price? There are actually a lot of reasons for this, as a lot of little things add up to a lot of savings for you. It might be annoying to have to deposit a coin to get a shopping cart (even though you get it back), but that saves them the trouble of hiring an employee to move carts. Let's take a look at the truth about Aldi's really low prices.
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00:00If you've ever shopped at Aldi, you know they save you money.
00:04Lots of money.
00:05Their legions of fans will attest to the fact that they're not selling cheap, inferior products.
00:09So how do they get those prices so low?
00:11It turns out there are a ton of ways Aldi got creative with cutting costs so they can
00:15pass those savings on to you.
00:17Let's break down how they really do it.
00:20Prime time
00:21Staying open late might be convenient for the customer, and some of us even prefer going
00:25grocery shopping in the middle of the night.
00:27Those that do, do it to avoid the crowds, and since there's not too many people shopping
00:31at midnight, that means grocery stores are spending more than they're making.
00:35Aldi eliminates the problem by only opening during peak shopping hours, and that means
00:38they usually close at 7, 8, or 9 p.m.
00:41It cuts down on everything from staffing costs to utilities, and according to Aldi Corporate,
00:46a lack of late-night noise makes them a great neighbor, too.
00:49Added benefit?
00:50Daytime hours means no werewolves.
00:52Everybody wins.
00:54Taking the air out
00:55Ever ripped open a bag of chips or cereal to find half of it's filled with air?
01:00That's actually called olage, and minimizing the olage in their packaging is one way Aldi
01:04saves money.
01:05Less air means smaller boxes and bags for the same amount of product.
01:08The smaller packages create some serious savings from start to finish.
01:12Items cost less to package, more fit on a single pallet, more fit on a truck, stocking
01:16the store can be done with lower fuel costs, and once the products are there, they take
01:20up less room, making stocking way more efficient.
01:23The effect is so substantial, it's hard to believe more places don't do it.
01:28Help us out
01:29There's nothing more annoying than going to Aldi and realizing you've forgotten your shopping
01:33cart quarter.
01:34But that little inconvenience keeping you from accessing the carts for free saves you
01:37a ton of money in the long run.
01:39Plus, too many rogue shopping carts is totally dangerous.
01:42Since customers are doing the legwork and returning carts to the trolley at the front
01:46of the store, Aldi doesn't need employees to do it.
01:48Labor costs are one of any business's biggest expenses, and every little bit helps.
01:53Especially when it adds up to hours and hours of time saved every week.
01:57They spend extra up front
01:59According to documents released by Aldi that detail their requirements for a location,
02:03they're incredibly specific in what they look for.
02:05Not only is the perfect Aldi location on a street corner and near other stores, but the
02:09cost-saving measures start at this stage of the game, too.
02:12Aldi says their carefully placed stores are built with only the best, most durable, and
02:16long-lasting building materials.
02:18It'll cost more up front, but they're thinking long term.
02:20Aldi properties tend to cost the company less over time because of low maintenance
02:24costs, few things that need replacing, and they sustain little to no wear and tear.
02:28The benefits are twofold.
02:30It saves them money, and it makes them a good neighbor.
02:33Just the essentials
02:35You won't need to choose from 20 different types of brown rice when you go to Aldi, and
02:39that's because they limit their stock.
02:41You might have noticed this, but you might not realize just how limited your choices
02:44are.
02:45Aldi keeps around 1,400 core items in stock all the time.
02:48That sounds like a lot, but not when you compare them to competitors like Kroger and
02:52Wegmans.
02:53On average, these Aldi competitors keep around 30,000 core items.
02:57That's a big difference.
02:58They probably have 40 different kinds of tea, so a rational, thoughtful, careful shopping
03:04trip, you'd be dead of starvation before you finish shopping.
03:08Limited stock allows Aldi to save money by buying in bulk.
03:11Instead of 20 different types of ketchup, Aldi buys a huge quantity of one or two kinds.
03:16After that, all those bulk discounts make their way to you, and let's face it, you need
03:20a lot of ketchup.
03:21Oh, that's enough ketchup.
03:22Come on.
03:23Dale.
03:24I like it.
03:31Private label
03:32Aldi Corporate says more than 90 percent of the items on their shelves are part of their
03:35own private label, and there are many reasons they do this.
03:38Not only does it allow them to keep strict quality control measures in place, but it
03:42also allows them complete control over everything that happens along the supply chain.
03:46This eliminates a part of the process that increases prices at other stores, the middleman.
03:51There are no extra markups, and since Aldi is doing so much in-house, they're able to
03:55pass along some serious savings.
03:58Produce Imperishables
03:59Oh, what's this place called?
04:03This is, I believe, called Food Libraries.
04:06As much as some people like the store, Aldi isn't for everyone.
04:10The store has limited selection when it comes to things like produce and perishable items,
04:13and actually, that's on purpose and built into their business plan.
04:17Since there's no guarantee something super perishable like fruit or vegetables will sell
04:20before it goes bad, they minimize their risk by stocking less of it.
04:24The company has said that its goal when it comes to ordering, stocking, and selling perishable
04:28items is simple, minimize waste.
04:31It saves them money, it saves you money, and the food that doesn't sell often goes to charitable
04:35organizations to make sure it goes to good use.
04:39Just in time, just enough
04:41Take a glance around an Aldi store and check out the footprint.
04:43There's not a whole lot of space for storage, and that's by design, too.
04:47Unlike a lot of stores, Aldi doesn't have a majority of their cash tied up in merchandise,
04:51and that's because they use an inventory system called the Just-in-Time model.
04:54So how does that help?
04:55It means they're able to lower their operating costs by not keeping a supply of stock in
04:59warehouses and storerooms.
05:01That new stock is ordered only when it's absolutely needed, and it relies on the ability to keep
05:05ridiculously good tabs on demand and product movement.
05:08It's risky.
05:09If there's a breakdown in the supply chain, it could be disastrous, but Aldi's reliance
05:12on their own private label brands give them an advantage here, too.
05:16Stocking shelves the easy way
05:18When it comes to getting product off the truck, into the store, and on the shelves, Aldi has
05:22it down to a science.
05:24Product is typically shipped in the same boxes it's going to be put on the shelves in.
05:27Their boxes aren't just boring old cardboard, but specially designed to look like they're
05:31a part of the display.
05:33Milk is shipped preloaded onto racks, so it just needs to be wheeled into place with no
05:36need to shuffle around new and old product.
05:39Some things, like basic baking supplies, will always be found on the lowest levels of Aldi's
05:42shelves, and that's because they're put into place still on the pallet.
05:46Since stocking takes Aldi's employees a fraction of the time it takes other stores' employees,
05:50that frees them up to do other tasks and cuts back on labor costs.
05:54Do you work here?
05:55While a traditional grocery store might have dedicated roles for everything from stocking
05:59shelves and running the cash registers to maintaining the deli counter, Aldi keeps staffing
06:03to a minimum by expecting employees to be versatile enough to fill a variety of roles.
06:08If you're looking at career opportunities available in the U.S., you'll find Aldi stores
06:11hire a store manager, manager trainee, shift manager, and store associate.
06:15What you won't find are job descriptions, and that's because there are a huge variety
06:19of tasks each employee is expected to handle.
06:21Aldi's pretty mum on how many employees they officially have, but according to an Indeed
06:25Q&A, there are between eight and ten people employed at every store, and there are never
06:29more than four on shift at any given time.
06:32Everyone's expected to do a little bit of everything, and that means there's little
06:35downtime for employees.
06:37They're compensated well, but Aldi says right up front, the job isn't for everyone.
06:41Energy efficiency
06:43The smaller footprint of Aldi stores is just one way they minimize their operating costs.
06:47All Aldi stores are designed and outfitted to be as environmentally friendly as possible.
06:52Many Aldi stores are running on a complete energy management system that monitors the
06:55energy impact of everything from lighting to cold storage.
06:58New stores are outfitted with the most efficient technology, and older stores are routinely
07:02upgraded to make sure they're running at peak efficiency.
07:05That includes being equipped with things like LED lighting, natural lighting, energy-saving
07:09coolers and freezers, and they also use heat recovery technology that lowers their heating
07:13costs by as much as 30 percent.
07:16BYO bag
07:17Do you have your reusable bag?
07:20Uhhhh…
07:23On the surface, it seems like another inconvenience.
07:26When you go to Aldi, you'd better remember your reusable shopping bags, or you're going
07:29to be buying some more bags.
07:31They don't just do it to be environmentally friendly.
07:33Handing out shopping bags adds up when you take into account all of Aldi's customers
07:37worldwide.
07:38And if they're not buying bags for every one of those customers just to throw away, that's
07:41a huge savings they're passing on to you, and the planet.