Wal-Mart is screwed. According to new commentary, it appears that Aldi, a super-discounter that generally serves low-income neighborhoods (on this continent, anyway), may be prove to be a formidable foe for Big-Box Behemoths. Their recipe for success includes chain-specific brands, amazingly low prices, high quality, small stores.
Aldi offers the same staples Wal-Mart does, but with an added wrinkle: convenience. You can get in, buy your stuff, and get out without having to negotiate a veritable labyrinth of departments, aisles, et cetera. By way of personal testimony, the vitamins you pay $10 for at the grocery store cost $3 at Aldi. $3 cans of mixed nuts cost $2. And don’t get me started on breakfast cereal.
Again, there is an important point that bears repeating. Aldi creates a lot of shareholder value, to be sure. The real, tangible benefits, however, accrue almost exclusively to the poor. Congratulations, Joe Sixpack. Thanks to your friends at Aldi, you can eat lobster tails, fresh vegetables, and cheesecake for dinner tonight. Don’t get me wrong, I still love Wal-Mart and Target. My wife and I joined Sam’s Club on Friday. But it looks like they are going to have to hustle to keep up with the (relatively) new kid on the block.
