Aldi, the supermarket chain known for discounted canned goods, is working on broadening its assortments. Now the grocery store offers meat, wine and beer, and in some locations it even offers organic vegetables and fruit. Similarly, big-box Target has been working to improve its grocery assortment as well.
Much of the assortment expansion can be attributed to the fact that Aldi is scaling up in size—from the traditional 10,000-sq.-ft. store to 15,000 sq. ft. or more—and outfitting new stores shiny tile floors and wide aisles to make the shopping experience more pleasant, reported Crain's. The German-owned company is also expanding its American presence, now totaling 36 stores in Chicago's metro area and 150 including the outlying suburbs.
More than 90 percent of Aldi's products are private label, so the test will be whether or not new stores in middle-class neighborhoods will ultimately generate interest in the chain's product offerings.
In order to save shoppers money, Aldi's cans are stacked on the floor in their shipping boxes instead of being unpacked. And while most grocery stores carry around 50,000 items, Aldi has less than 2,000.
But despite discounts, no costs are cut from employee wages: earnings start at $13 minimum an hour and include health insurance and other benefits. This is well above the federal minimum wage of $7.25 an hour and even above the recent pay increase of $9 an hour announced by the company's competitor, Walmart (NYSE:WMT).
Target (NYSE:TGT) is also tweaking and expanding its grocery selection. The initiative began six years ago, but is still a work in progress, reported the Star Tribune. As the company moves forward, fixing the food department is crucial.
Executives at Target speculate that a more appealing grocery department can drive one additional shopping trip every three months to the store, and would increase the chain's sales by $2.5 billion annually.
In preparation for the grocery overhaul, the company has been surveying customers and researching competitors. Tests are running in the Chicago area and will roll out nationally next year.
-See this Crain's article
-See this Star Tribune article
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