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I think millennials and people in general don't know what the word bargain means. They just want what's hip and trendy, bargains included. They don't think about the ramifications of purchases or racking up credit card debt.
Yeah I can see what you mean . Like the whole Groupon thing . People thinking they are saving money but they are really just spending more .
Also lots of stores around la claiming they have "wholesale prices " or "outlet prices "
Everyone wants to feel they are getting a great deal .
Costco same thing . Yeah the prices are good but how many people actually use all the stuff before it expires ?
If you buy something in bulk and then only use a small portion of it and it expires .. how much did you save?
Costco same thing . Yeah the prices are good but how many people actually use all the stuff before it expires ?
If you buy something in bulk and then only use a small portion of it and it expires .. how much did you save?
Costco is our other main go-to store, but its forte is definitely large household, family, or commercial oriented. I never shopped there when I was single, for the reasons you mention. But if you are in a position to use everything you buy, Costco is great. Plus you never know what they may have in the middle of the store
I think millennials and people in general don't know what the word bargain means. They just want what's hip and trendy, bargains included. They don't think about the ramifications of purchases or racking up credit card debt.
The evidence has been contrary to that in terms of credit card debt. As a generation, millennials are overall significantly more adverse to credit card usage than the two generations before it. The generation is relatively frugal (and somewhat less well off than previous generations for the same age).
Anyhow, that was an interesting article. Another successful chain in southern California is H Mart which seems to be able to keep busy, clean, and relatively cheap
The evidence has been contrary to that in terms of credit card debt. As a generation, millennials are overall significantly more adverse to credit card usage than the two generations before it. The generation is actually surprisingly frugal (and somewhat less well off than previous generations for the same age).
I wonder if part of it could be a lot of them living at home
In CA of course a lot of that is because housing is so high .
2 out of 5 millennials live at home.
Also many millennials have massive student loan debt , it's not credit card debt but still debt .
Student loan debt is at 1.3 Trillion
Albertson's has always felt run-down to me, no matter the neighborhood (the one on Wilshire in West L.A. particularly springs to mind - nice neighborhood, totally run-down store), and I never quite understood what they offered that the nicer Ralph's and Vons didn't.
Vons is a subsidiary of Albertsons. The whole Albertsons corporation seems to be in some difficulties. As far as I know they are the third largest food retailer in the U.S. but they are unable to make profits since quite a few quarters. Increasing competition could derail Albertsons.
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Aldi is a lower-end grocer, with off-name brands, a limited selection and no fresh meat counter or bakery. As such, its competitors are Food4Less, Fresh&Easy, Save-A-Lot, Jons (to a certain degree) and a number of small ethnic chains. A secondary competitor would be WalMart and K-Mart (are there any left in L.A.?), but, again, the selection at Aldi is much more restricted than at the larger stores. Any of the higher-end stores shouldn't really be threatened by Aldi. That Albertson's and Ralph's are closing down stores cannot be definitively attributed to Aldi increasing their presence. Correlation vs. causation.
All grocery chains compete against each other. It's really not uncommon for customers to shop at Aldi and Wegmans or at Aldi and Publix and so on. For me it's completely normal to shop at discount stores like Aldi AND at fancy high-end grocery stores. For me it's the quality that matters. It might be correct that Aldi in the U.S. still mainly attract low income groups, but that will surely change. So far this shift occurred in all countries that were entered by discount chains like Aldi.
The average customer just purchase 300 - 400 different grocery items per year. That's less than 1% of the selection of large grocery stores.
You are right about that high-end stores are less affected by the surge of Aldi. Going upscale is a good answer to the threat from Aldi and the likes.
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What millennials don't want is to pay higher prices for the same box of cereal because the store needs money to cover substantial overhead. This is why we rarely shop at stores like Gelson's (serious question - can someone explain to me how they continue to stay in business?) - there's just no compelling reason to do so. Sure, the more frugal among us will give Aldi a go, but based on its limitations it will never become our #1 go-to store.
For me it's a mystery why there are still so many smaller regional grocery chains in the U.S. The U.S. grocery market is much more fragmented compared to other developed countries. I'm quite sure that many of these smaller grocery chains will disappear in the next 10 years or so. More stores and higher sales means higher buying power towards the manufacturer and therefore lower prices. It also means fewer overhead per store or sales. It's just easier to stem advertising costs or developing a new store design when you have more stores and higher sales.
Vons is a subsidiary of Albertsons. The whole Albertsons corporation seems to be in some difficulties. As far as I know they are the third largest food retailer in the U.S. but they are unable to make profits since quite a few quarters. Increasing competition could derail Albertsons.
I didn't know that. Thought they were Safeway-owned, although after a perfunctory Wiki search it looks like I was sort of correct - it's just that my info was about three years behind the times. Makes sense, though - most Vons I know aren't all that nice, either. Even though I have a soft spot for them - was my go-to store when I first moved to Tarzana in 1996. They actually did a decent job renovating that store, but lots of their other locations are far behind Ralph's.
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All grocery chains compete against each other. It's really not uncommon for customers to shop at Aldi and Wegmans or at Aldi and Publix and so on.
I agree - to a point. But you aren't going to see Whole Foods closing down a location just because an Aldi moved in next door.
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For me it's completely normal to shop at discount stores like Aldi AND at fancy high-end grocery stores. For me it's the quality that matters. It might be correct that Aldi in the U.S. still mainly attract low income groups, but that will surely change. So far this shift occurred in all countries that were entered by discount chains like Aldi.
Having been to quite a few other countries where Aldi maintains a presence, I'm not sure I agree with the assertion that the customer base will change - not unless their merchandise changes in a fairly dramatic fashion.
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The average customer just purchase 300 - 400 different grocery items per year. That's less than 1% of the selection of large grocery stores.
You are right about that high-end stores are less affected by the surge of Aldi. Going upscale is a good answer to the threat from Aldi and the likes.
Yep. Most people who do the majority of their shopping at Whole Foods and the like do not really concern themselves with saving a couple bucks on their box of blackberries. Once you are in the low- to mid-level crowd, you are flirting with price wars and have to differentiate yourself in different ways. Ralph's will be OK because of their deli, fresh meat and alcohol department. Other, less-fancy, if you like, stores will lose out if Aldi undercuts them on pricing for those 300-400 items. That's why I'd say that Food4Less might be looking over their shoulders.
Albertson's and Safeway are publicly-held corporations; Ralph's is one of the major components of Certified Grocers of California, a cooperative similar to Wakefern / Shop-Rite in the Northeast. That disparity might have some influence in determining who survives, and who doesn't.
Safeway belongs to Albertsons and they belong to Cerberus Capital Management. That's a private equity firm. Ralphs is just a banner from Kroger. Kroger is surely a very strong food retailer, but I doubt that they will do their business under so many different banners for ever. With declining margins they will be forced to cut costs even more. They could do that (among others) by reducing the number of banners.
Among the big grocery retailer in the U.S. Albertsons seems to be the one that is the most in danger.
From Wikipedia:
Albertsons operates stores under the following banners (number of stores):
Safeway: 1,308
Albertsons: 575
Vons: 325
Jewel-Osco: 187
Acme: 178
Shaw's and Stark Market: 169
Tom Thumb: 64
Randall's: 44
United Supermarkets: 37
Pavilions: 36
Carrs: 24
Haggen: 15
Market Street: 12
Amigos: 4
Lucky: 2
Super Saver Foods: 2
To me it looks extremely inefficent to operate grocery stores under so many different banners.
I agree - to a point. But you aren't going to see Whole Foods closing down a location just because an Aldi moved in next door.
I would say quite the opposite. Both stores (Aldi and Whole Foods) would benefit if the other chain opens a store nearby. It makes for all chains normally a lot of sense when there are different store formats directly next door. But it's maybe different with Aldi vs. Whole Foods. Customers of Whole Foods could think that the opening of a nearby Aldi is a sign of a downward spiral for the whole neighborhood and could avoid this Whole Foods location
A Save A Lot store could be in danger when an Aldi store opens nearby.
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Having been to quite a few other countries where Aldi maintains a presence, I'm not sure I agree with the assertion that the customer base will change - not unless their merchandise changes in a fairly dramatic fashion.
Hmm, I could imagine that you have visit countries where there are stores from Aldi-Nord? This chain operates besides Northern and Eastern Germany in France, Spain, Portugal, Belgium, the Netherlands, Luxembourg, Denmark and Poland. Their stores have indeed a quite bad reputation. They are indeed considered low end.
The Aldi stores in the U.S. are part of Aldi-Süd, they operate besides Southern and Western Germany and the U.S. in the UK, Ireland, Switzerland, Austria, Hungary, Slovenia and Australia. The reputation of Aldi-Süd seems in all the markets quite good (it's maybe still different in the U.S.).
Aldi was very successful by drawing middle class shoppers in the UK:
The market share of Aldi and Lidl in Ireland is now about 23%. That's already quite a lot, especially considering that in volume terms the market share would be significant higher.
Their market share in the UK is now about 11-12% and still rising strongly. Most affected by the rise of the discounters in the UK is Asda (a Walmart subsidiary). Before the rise of Aldi and Lidl, Asda was the cheapest conventional supermarket in the UK. The former main selling point of Asda is gone. The least affected chains are the upscale grocers Waitrose and M&S.
Sales per store of Aldi-Süd in Germany are highest in and around Munich, the most affluent part of Germany. In more affluent regions people buy fancier and therefore pricier food at Aldi compared to less affluent regions.
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Yep. Most people who do the majority of their shopping at Whole Foods and the like do not really concern themselves with saving a couple bucks on their box of blackberries. Once you are in the low- to mid-level crowd, you are flirting with price wars and have to differentiate yourself in different ways. Ralph's will be OK because of their deli, fresh meat and alcohol department. Other, less-fancy, if you like, stores will lose out if Aldi undercuts them on pricing for those 300-400 items. That's why I'd say that Food4Less might be looking over their shoulders.
It's probably different in the U.S. In Germany basically all people tend to be thrifty, no matter how affluent they are It would be very difficult to find a customer that doesn't shop regularly at a discount grocery store.
That's even more amazingly considering that the upscale grocery stores offer their private label products basically for the exact same prices as the discounters. There are often price comparisions between the biggest grocery chains. For example this one for a basket of goods of private label products:
Rewe and Edeka are traditional supermarkets where stores are often extremely fancy. People can shop there without spending more money than they would spend at the discounters Aldi or Lidl. But the results would be different when including produce. Produce is significant cheaper at the discounters.
Aldi in the U.S. will not drive a single food retailer out of business directly. Therefore their market share is way too small. But quite a few Walmart shoppers switch to Aldi. To maintain their market share Walmart will fight back by lowering prices. But lower prices at Walmart will force the next biggest grocer Kroger to lower their prices, too. And that is then the reason why some less potent grocery chains will be forced out of business. Even a chain like Whole Foods has to lower their prices as an indirect result of the rise of the discounters like Aldi.
You just can't beat Aldi's prices, although Walmart is highly competitive. I feel as though Trader Joe's, Whole Foods, and Sprouts are niche stores that will survive. I predict Stater Bros will as well, they are remodeling most of their stores.
But the bottom line is there is no way the current number of stores will survive in the long run. I feel Albertsons might be the first on the chopping block. Maybe Vons after that? Ralphs seems to have a nice strong hold on things, and a successful model.
I think it's the Millennials and their bargain attitude. Some of the higher end stores are just going to have trouble surviving this new economic environment. And just wait until Amazon opens their stores around town, oh my!
I have been saying for years, just like the number of indoor malls, unbelievable number of chain restaurants the days of huge, national grocery stores are dying. I would hate to see Stater Bros go just cause we used to love shopping there years ago when we lived in Glendora. at the time there were only about 1/2 dozen, if that many Stater Bros and I never thought of them as massive chains.
I think the future of shopping is on line, and specialty stores or big box. We are seeing more and more stores like Sprouts, Whole Foods, and Fresh Market popping up all the time. Add to it specialty discount companies like Aldi's and the future of shopping, as we know it, is a thing of the past. It will take longer to see big box stores, like Sam's and Costco fade, if they do in our life time. Let's not forget Trader Joe's.
We have had Aldi's here for many years. Most people can't get enough of them. We only shop there about once a month but love the place.
Ludi's is getting ready to come on the scene on the East coast.
I think millennials and people in general don't know what the word bargain means. They just want what's hip and trendy, bargains included. They don't think about the ramifications of purchases or racking up credit card debt.
wow, this doesn't describe our 2 granddaughters and they both have more money than most of us ever hope for when we were in our early 30s. One is a nurse practitioner, one a stay at home mom. Both shop for bargains, use coupons and budget closely. Of course they do eat out or order in more than we did at their ages and vacation more than we did, but they are pretty frugal.
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