Aldi and Trader Joe's use the same strategy to reach totally different customers. Here's how they compare.
Mary Meisenzahl
AP Photo/Martin Meissner
- I visited Trader Joe's and Aldi stores to see how the two beloved chains compare.
- Both rely heavily on private-label brands for most products.
Aldi and Trader Joe's are two popular grocery stores with locations in the US that rely on private-label brands and loyal customers. I visited both stores to compare them.
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Trader Joe's, which has more than 500 locations, is owned by the same family that operates Aldi Nord.
Trader Joe's. Joe Raedle/Getty Images
Source: Trader Joe's, Insider
Aldi stores in the US are operated by a separate business, Aldi Sud. "Trader Joe's has no business or ownership relationship with Aldi Sud (including Aldi U.S.)," the Trader Joe's website states.
Shoshy Ciment/Business Insider
Source: Trader Joe's
When I walked into the Rochester, New York location, the first thing I saw was all the flowers.
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Trader Joe's is known for its collection of flowers at discount prices, like the $4 bouquet I bought. Offerings change seasonally, with pumpkins and gourds in the fall and wreaths around the holidays.
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Now that it's spring, there are daffodils and other starters for flowers.
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Inside the main area of the store, the space is mostly wide open. Displays and aisles don't extend to the ceiling, so it's easy to see around the whole store.
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The front section of the store doesn't really have typical grocery store aisles, just large displays.
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The produce section is right in front of the flowers.
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Most of the produce is loose on multi-tiered shelves.
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Despite the relatively small size of the produce section, there was a large selection of fruits and vegetables including mangoes, pineapples, and five or six types of apples.
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Trader Joe's bananas are an especially good deal compared to prices at other grocery stores, though the rest of the produce is more expensive generally.
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Source: Insider
A refrigerated section sits behind the produce, where berries and some pre-cut fruits were also available.
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The wall behind the produce section is filled with greens and pre-packaged salads.
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The next part of the refrigerated section holds cheeses, dips, and spreads.
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Trader Joe's is particularly beloved by loyal customers for its unique cheeses, which are sold on their own as well as used in ravioli and other pastas.
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Source: Insider
The next few aisles are packed with frozen foods. The chain typically adds personal touches to locations, like end caps highlighting employees' favorite products.
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The aisles showcase frozen appetizers, meals, and desserts, divided by type of cuisine.
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For example, the breakfast area has frozen croissants, sausages, and hash browns.
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Some foods were divided by region, like frozen spanakopita and baklava.
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There are also easily prepared entrees and main courses, like ribs, chicken nuggets, and almost anything else you can think of.
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The frozen pizza section alone is far more extensive than at a typical grocery store.
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These frozen dishes come from Trader Joe's private-label brands, which are frequently swapped out.
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The next few aisles contain snacks, also in Trader Joe's own brands.
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Some products, like Joe-Joe's, seem like a clear alternative to name brand Oreos.
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Other snacks with more uncommon flavor combinations seem unique to Trader Joe's.
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Some Trader Joe's items are produced by third-party brands and sold under the Trader Joe's name. In 2017, Eater identified some of the manufacturers including Stauffer's and Naked.
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Source: Eater
At Trader Joe's, many products are organic, which tends to make items more expensive than their non-organic counterparts.
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That means in many cases, Trader Joe's doesn't have the lowest grocery prices in town, though it may have the lowest prices for organic products.
Mary Meisenzahl/Insider
Source: Insider
At checkout, Trader Joe's employees take the cart, unload it, and bag groceries for customers.
PAUL J. RICHARDS/AFP/Getty Images
Workers are so friendly that some customers have theorized that they're instructed to flirt with shoppers, which workers deny.
Joe Raedle / Getty Images
Source: Cosmopolitan
I don't think I've ever left Trader Joe's without buying some new snack to try, and then chatting about it with the cashier.
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Next, I visited Aldi, a discount grocery chain founded in Essen, Germany in 1961. In 1976, the company opened its first US location in Iowa and today it has more than 2,000 stores in 36 states.
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To pick up a cart at the entrance of the store, I had to put a quarter inside to unlatch it from the rest of the carts.
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I got my quarter back when I returned the cart at the end of my shopping trip. Aldi doesn't have to pay workers to return shopping carts, because customers are incentivized to do it themselves.
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As retailers grapple with a shortage of workers, eliminating low pay positions is one way businesses can stay ahead.
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I walked inside and was immediately in the produce section.
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Most of the fruits and vegetables — including apples, celery, and cucumbers — were pre-wrapped in plastic.
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The rest of the store looked similar to the produce aisle.
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Products are on shelves right inside their cardboard packaging.
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Or, they're still in pallets used for transportation.
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This also saves money on labor, because workers don't have to spend time unboxing each product and arranging them on shelves.
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Aldi stores are a bit smaller than traditional grocery stores at about 12,000 square feet, with just five large aisles, a similar layout to the Trader Joe's I visited.
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Like Trader Joe's, Aldi is known for selling its own private-label brands, which keeps costs down.
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Aldi does sell some well-known brands like LaCroix, but the Aldi private-label version is stocked right next to it.
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Aldi takes care to make its products look similar to brand names. These boxes of macaroni and cheese could definitely pass for Kraft without a closer look.
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Aldi and Trader Joe's both sell their own branded versions of popular items from big food brands, but Aldi's products seem to more closely match the name brand alternatives.
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The meat section was well stocked, though smaller than at other stores in my area. The prices were among the best deals in the store, though.
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Next to the meat there was a large freezer section with frozen meals, snacks, and desserts.
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A section in the center of the store seemed to be made up of odds and ends, with storage items, appliances, toys, and other mismatched items.
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Aldi also cuts costs at the checkout aisle, where cashiers save time by not bagging groceries. The process is much faster and more efficient at Aldi, where speed is clearly prioritized, compared to the more leisurely and attentive treatment from workers at Trader Joe's.
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Customers can take their carts to a shelf against the back wall and bag groceries themselves into reusable bags Aldi sells or free boxes to carry heavy items.
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Aldi's branding is built around its budget strategy — its biggest fans know what they're getting with low-cost groceries and no-frills aisles.
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Some areas of the store seemed a bit disheveled, but customers didn't seem to mind.
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The chain has found a successful niche among budget-conscious shoppers in the US — a recent comparison by Insider found Aldi pricier were lower than those at Walmart and Trader Joe's on most items.
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Source: Insider
Aldi and Trader Joe's both base their brands around selling private-label products, but their strategies for reaching customers couldn't be more different.
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Trader Joe's tends to be well organized with neat shelves, famously friendly employees, and a vast selection of organic and specialty products.
Trader Joe's in New York City. Robert Nickelsberg/Getty Images
Aldi is less attractive to look at, with boxes and pallets on shelves and fast-moving cashiers who don't usually have time to chat.
Mary Meisenzahl/Insider
Aldi is for customers looking for major savings and the absolute lowest grocery prices, and Trader Joe's is for customers willing to pay a premium for specialized products. Both chains use their private-label brands in pursuit of these distinct groups of shoppers.
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Do you have a story to share about a retail or restaurant chain? Email this reporter at mmeisenzahl@businessinsider.com.
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