Common Tragedies

Thoughts on Environmental Economics

It’s Saturday and I’m off-topic

Posted by Daniel Hall on February 9, 2008

I’m semi-homeless at the moment and living with friends up near the edge of the District. This provided the opportunity to wander over into Maryland just beyond the border of northeast DC for one of the most unique shopping experiences I’ve ever had.

Have you heard of Aldi grocery stores? Put a chain grocery store, a dollar store, and a warehouse discount store (e.g., Costco) into a blender and, “Voila!” out comes Aldi. The store had many distinguishing (disconcerting?) features, which I’ll list below the fold:

1. Almost everything is quite cheap. I would guess I saved 20-60% on every item I bought, and probably about 30% on my total bill compared to regular grocery store prices. Items seemed to generally be around or below the sale prices you see in stores.

2. Everything is store brand (think Costco’s Kirkland brand) — don’t expect much selection. (Apparently, however, their store brand has a reputation for being relatively high-quality; I haven’t had a chance to test this myself.)

3. There are no shelves. Items are left on pallets, which are arranged to create the aisles. This means that there are far fewer items in the store than at a conventional grocery store — let alone a Costco warehouse — where the shelves allow items to stack much higher.

4. The store was quite small — 7 aisles or so (and not large ones), with staples like bread, dairy, meat, and some frozen goods around the perimeter. Oddly, despite the limited space, the store carries more than just groceries: almost an entire aisle was taken up by not only household goods but also electronics!?!

5. The checkout procedure — which apparently is standardized across stores — is unlike any American grocery store I’ve been in. The conveyor belt is longer (frequently 3 shoppers could fit their groceries on the belt at the same time). The cashier sits in a stool/chair at the very end of the belt in front of a scanner, but there is nothing beyond her. When you reach the cashier you wheel your cart next to her and she begins rapid-fire scanning your items and filling them right back into your cart. There are no shopping bags. You can bring your own and attempt to start to fill them as the cashier scans, but good luck keeping up — the clerks appear to be ruthlessly (Germanly?) efficient. This efficiency meant that the checkout line did not take nearly as long to clear as I feared when I got in line — there were 3 cashiers and each had at least 6 people in line when I went to check out. Also, they don’t take credit cards. Bring cash, or a debit card.

6. Bring a quarter! You must have one to get a shopping cart. You insert the quarter into the locking mechanism on the handle to obtain the cart and then get the quarter back when you return the cart (to the queue at the front of the store). This means that there are no shopping carts cluttering up the parking lot, and the store does not employ attendants to collect them.

Here are other random observations and thoughts from my first Aldi experience:

7. I think I was one of only 3 white people in the store. I think native English speakers composed less than half store’s population.

8. Based on my small sample I claim that you are far likelier to see something weird than at a “normal” grocery store. One man was standing in the checkout line with a grocery cart filled entirely with nothing but whole milk (at least 8 gallons) and individually packaged rolls of paper towels. Another woman was haranguing a clerk about a 30 cent price discrepancy on a 6-pack of ramen noodles. (It turned out she had grabbed “instant lunch” (beef flavor) instead of “ramen” (chicken flavor).)

9. Not every item was cheaper; for example, eggs were almost $2 a dozen, which while not more than other stores seems to be about the going rate these days. Perhaps even discount stores are not immune to the current run-up in grain prices?

10. I am fairly certain most of the “green” consumers I know would find the store odious. Beyond being put off by the lack of any organic options, they would likely surmise that any store that can offer prices that low is probably doing all kinds of underhanded or immoral things — acting like Wal-mart or whatnot! I wonder, however, if their unction would be well-placed. Are the low prices a function of Aldi sourcing its products from the “least sustainable” and biggest agribusinesses, or does streamlining their offerings and increasing the efficiency of their supply chain let them realize savings? Carbon pricing would make for an interesting test case, because if it is the latter then the efficiency of Aldi’s supply chain would increase their edge over competitors.

11. I’ve never felt so outside of America in a grocery store before. (Wegmans would come in second, for entirely different reasons.) This got me thinking: What factors have led to American chain grocery stores being so similar? Is it economic forces, or cultural ones? How did we end up with current dominant model? Why has the presence of a grocery store “monoculture” not allowed more space for niche competitors to emerge? Admittedly the current trend may be towards more variation, for example, Whole Foods. On the other hand, Whole Foods has become much more like traditional chain stores over the last decade, while chains have shifted subtly to incorporate some of Whole Foods’ innovations. Does the dominant model work mostly because we are all currently comfortable with it and know how to work that system? I will admit it was disorienting just trying to navigate Aldi.

12. When I went to return my cart there was a young couple in front of me slotting in a quarter to obtain theirs. This meant I had to stand about 10 feet back and wait for them to move before I could wheel my cart forward and lock it back in to retrieve my quarter. Before they cleared out of the way I heard a “Hello!” from over my right shoulder. I turned to see a portly Hispanic woman offering me a quarter and a broad smile. I returned the smile, wheeled my cart towards her, and slid her quarter into my pocket as I walked back towards my car.

7 Responses to “It’s Saturday and I’m off-topic”

  1. Evan Herrnstadt said

    We had an Aldi in Iowa City. One big positive I remember was pretty great chocolate for very reasonable prices. Ah, Germany. Also, the store must do quite well, as the founder of Aldi’s (Karl Albrecht) is Germany’s wealthiest man with a net worth of nearly $20 billion.

  2. moom said

    Sounds pretty much the same as the Aldi Stores here in Canberra, Australia. But they DO have some organic products. It is more similar to a European grocery store than other Australian supermarkets. Here the shopping cart (or trolley in Australian) requires a dollar coin. Interestingly, in the Canberra Centre mall the nearby Supabarn supermarket just introduced coin operated trolleys in the last few weeks. For some reason they require a two dollar coin. Coin operated trollies are very common in Europe. Grocery baggers on the other hand are a uniquely American phenomenon. I guess a function of the low minimum wages in the US.

  3. moom said

    PS – they do take credit cards here, but charge a surcharge.

  4. Susie said

    “10. I am fairly certain most of the “green” consumers I know would find the store odious.”
    On the other hand, Theo Albrecht, Karl’s brother, owns Trader Joe’s, which is pretty popular among green consumers.

  5. Daniel Hall said

    Trader Joe’s, which is pretty popular among green consumers.

    Blech. American-quality foods in Asian levels of packaging at European prices, all presented with Old World kitsch. I guess I am a bad greenie.

  6. evan said

    All I know is that when I shop at Trader Joe’s, I have about $50 extra per paycheck or so in my pocket. And they at least have a somewhat believable story explaining why that doesn’t entirely involve tiny hands (are you reading this, Old Navy?).

  7. evan said

    Also, I love how our posts that get the most comments never have anything to do with environmental economics…

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