More than 100 customers lined up for the Aldi store opening on Queen Street in Southington last month with some arriving as early as 5 a.m.
Most customers cite the store’s low costs as their reasons for shopping where the merchandise is in boxes, not on shelves, a quarter deposit is required to get a carriage, and customers must bring or buy their own bags.
Aldi, which is about 30 to 50 percent cheaper than Walmart, is growing rapidly. The chain has about 1,600 stores in the U.S. with plans to add another 500 in the next couple of years. Some retail watchers said Aldi, which arrived in the United States in 1976, is leading the new wave of grocery stores.
“The typical grocery store of 45,000 to 80,000 square feet is a dinosaur and it’s becoming extinct,” said Phil Lempert, author of the Supermarketguru.com.
Lempert and other supermarket analysts are watching some of the newer smaller grocery stores that have improved quality and cut services to save costs.
“All kinds of retailers are experimenting with all kinds of formats,” Lempert said. “The small store, 15,000 to 20,000 square foot store, is starting to take hold. They are all experimenting with that kind of format. It’s a bare-boned store.”
Some of the stores to watch include Aldi European competitor Lidl, which describes itself as a cross between Trader Joe’s and Harris Teeter, a grocery chain based in North Carolina. There is also 365 by Whole Foods, a smaller organic competitor now owned by Amazon.
365 by Whole Foods has six stores, with plans to add 16 more in the next year. Lidl announced plans last spring to open 20 Lidl stores along the East Coast by the middle of next year, according to Business Insider.
Aldi, which was founded in Germany in 1961, was originally named Albrecht Discount and is now where 90 percent of Germans shop, according to Slate.
Brothers Karl and Theo Albrecht founded the discount store together, but split up after a disagreement over selling cigarettes. Theo renamed his business Aldi Nord, and would control territories north of the Rhine, and parts of Europe.
Karl Albrecht headed Aldi Sud, which gave him southern Germany, some of Europe, plus the U.K. and Ireland. Both companies opened in the United States. Aldi Sud is Aldi in the U.S, Aldi Nord is Trader Joe’s.
“They learned a lot from Trader Joe’s,” Lempert said. “They are starting to ramp up with better options.”
Aldi was among the first retailers who took a stand on ingredients, and made the move to offer a “cleaner label.” This included eliminating high-fructose corn syrup, genetically modified organisms, and offering more fresh produce.
As Aldi faces more competition, it will go head to head in price giving shoppers even steeper discounts, Lempert said. “The supermarket world two years from now is going to be much better,” he added.