Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Aldi already has a huge distribution center in Southern California. Most important for the location of a grocery distribution center are short distances to the stores. Serving grocery stores in Southern California with a distribution center in Goodyear, AZ? That's at least a 5 hours drive. No matter how low the operating costs for a distribution center in Arizona are, it would never make sense to deliver grocery stores in Southern California from the planned distribution center in Goodyear.
If I had to guess, you are probably correct. But unless you have insider knowledge, you (like me) are guessing. Who knows, maybe the warehouse will focus on Mexican imports and then distribute produce to other locations/hubs. Time will tell.
From the sounds of it from some who have these in their area this isn't a big win and not some place I would shop. Questionable produce and meat, and cheap low quality generic items. So this place will be on par with food city. It will fail like fresh and easy and I'll stick to sprouts and frys.
I don't know where you're getting the "low quality" stuff from - coming from an Aldi's area, I was shocked at the prices for staples in Phoenix.. milk,eggs, bread, butter, cheese, sliced lunchmeat, tomatoes, basic canned goods, cereal, even chocolate are great deals, great quality & super fresh at Aldi.
Stuff gets brought in on pallets & the pallets from yesterday are gone.. there's no need for aldi's staff to put the old eggs & bread in front of the fresh stuff, because there isn't any old stuff in the store. One of the annoyances at the aldi in my hometown was caterers coming in and buying *all* the bread,milk, eggs, butter, etc. on a given day - they had to put up signs asking them to call ahead so they could have racks of staples for the caterers & still have food for their customers.
Food lion, wall mart & dollar stores aren't even in the same ballpark.
If you're a single guy, or a single mom with a bunch of kids & you want to stop at *one* store & not dink around with sales, coupons & loyalty cards, Aldi will feed you on the cheap. If you need weird/rare foo-foo ingredients, you'll be disappointed.
Yeah, true. That's why I said in my original comment that I think they plan on expanding here soon. I just don't think a distribution center always means that a company is opening stores in that same area. I wanted to point out reasons for why someone would have a distribution center here and operate in another state. I probably should have been more clear.
Re: the bolded... Actually, that's exactly what it means, especially for food distribution. The added cost to transport product over a greater distance is almost always significantly higher than any savings to be had from real estate, wages, etc. Maybe not in year 1, but over time that's always the case. To what extent it's more expensive depends on number of trucks needed to service the destination stores, average length of haul, the truckload market, and so on. For that reason alone, there's no way Aldi is putting a DC here without plans to open a large number of stores in and around Arizona.
Aldi is doing it a little bit backward though...typically the strategy is to penetrate a new area with stores and build a DC once you hit a certain level of market density. What that level of market density is depends on a variety of factors including the overhead cost of running a DC, whether you're positioned to run the DC yourself or via a 3PL, and transportation costs to the stores that would be serviced from that DC vs. the transportation costs for those same stores in their current distribution model. You also need to consider inbound distribution costs in the current and potential new scenarios, proximity to your supplier base, etc.
Quote:
Originally Posted by Zippyman
I don't know where you're getting the "low quality" stuff from - coming from an Aldi's area, I was shocked at the prices for staples in Phoenix.. milk,eggs, bread, butter, cheese, sliced lunchmeat, tomatoes, basic canned goods, cereal, even chocolate are great deals, great quality & super fresh at Aldi.
Stuff gets brought in on pallets & the pallets from yesterday are gone.. there's no need for aldi's staff to put the old eggs & bread in front of the fresh stuff, because there isn't any old stuff in the store. One of the annoyances at the aldi in my hometown was caterers coming in and buying *all* the bread,milk, eggs, butter, etc. on a given day - they had to put up signs asking them to call ahead so they could have racks of staples for the caterers & still have food for their customers.
Food lion, wall mart & dollar stores aren't even in the same ballpark.
If you're a single guy, or a single mom with a bunch of kids & you want to stop at *one* store & not dink around with sales, coupons & loyalty cards, Aldi will feed you on the cheap. If you need weird/rare foo-foo ingredients, you'll be disappointed.
Aldi isn't going to fail in Phoenix..
I agree...I think Aldi will do great here. And I'll say this... when I lived in the Midwest I shopped at Aldi when I was younger and pretty poor overall. The quality was crap, there was very little selection, and if they had any produce at all you'd be lucky if it didn't go bad within 2 days of getting it home. But it was cheap, and if you're poor and you need to buy groceries for your family on an extremely limited budget, Aldi was where you went.
Well, they've completely changed up their model since then. I was in an Aldi about a year ago and I couldn't believe I was in the same store. Yeah, there's still some items that look and taste like what the Aldi of old would sell, but the quality of the vast majority of their products was twice as good as it used to and much of it was just as good as what you'd find from the store brands at Kroger or Walmart. Sure it's not what you'd find at Whole Foods or Trader Joe's, but people who would shop at those stores probably aren't the same ones who would shop at Aldi.
I don't know where you're getting the "low quality" stuff from - coming from an Aldi's area, I was shocked at the prices for staples in Phoenix.. milk,eggs, bread, butter, cheese, sliced lunchmeat, tomatoes, basic canned goods, cereal, even chocolate are great deals, great quality & super fresh at Aldi.
Stuff gets brought in on pallets & the pallets from yesterday are gone.. there's no need for aldi's staff to put the old eggs & bread in front of the fresh stuff, because there isn't any old stuff in the store. One of the annoyances at the aldi in my hometown was caterers coming in and buying *all* the bread,milk, eggs, butter, etc. on a given day - they had to put up signs asking them to call ahead so they could have racks of staples for the caterers & still have food for their customers.
Food lion, wall mart & dollar stores aren't even in the same ballpark.
If you're a single guy, or a single mom with a bunch of kids & you want to stop at *one* store & not dink around with sales, coupons & loyalty cards, Aldi will feed you on the cheap. If you need weird/rare foo-foo ingredients, you'll be disappointed.
Aldi isn't going to fail in Phoenix..
Never been or even heard of Aldis until this thread just going but posts in this very thread about the low quality food. Phoenix has always had one of the most competitive grocery markets in the country and the big fish devour the little guys around here.
Never been or even heard of Aldis until this thread just going but posts in this very thread about the low quality food. Phoenix has always had one of the most competitive grocery markets in the country and the big fish devour the little guys around here.
I don't see the food market here as that "competitive" - if it were, you wouldn't need a stack of coupons and "loyalty" cards to get decent prices at the big chains. I really think you need to judge the "quality" of aldi's stuff for yourself - I suspect you'll be quite happy if you do. I prefer to buy meat from places that cut & pack on site, but I bought all my other staples at aldi's when I lived near one.
Aldi is doing it a little bit backward though...typically the strategy is to penetrate a new area with stores and build a DC once you hit a certain level of market density. What that level of market density is depends on a variety of factors including the overhead cost of running a DC, whether you're positioned to run the DC yourself or via a 3PL, and transportation costs to the stores that would be serviced from that DC vs. the transportation costs for those same stores in their current distribution model. You also need to consider inbound distribution costs in the current and potential new scenarios, proximity to your supplier base, etc.
Aldi is privately held. They do not have to worry about having a bad quarter or in opening a warehouse that is not fully utilized. It has been their practice to have the warehouse in place before they open a store. Companies owned by German trusts generally are far more concerned with profits five years down the road
Do realize that they completely turn their inventory 2-3 times a week and they cannot afford to have glitches in their distribution system that you get when you have a 3PL or direct shipments from vendors. Also, unlike most of their competitors, everything comes through their warehouse. There are vendors in the store stocking merchandise.
I don't see the food market here as that "competitive" - if it were, you wouldn't need a stack of coupons and "loyalty" cards to get decent prices at the big chains. I really think you need to judge the "quality" of aldi's stuff for yourself - I suspect you'll be quite happy if you do. I prefer to buy meat from places that cut & pack on site, but I bought all my other staples at aldi's when I lived near one.
I tend on shopping for the deals. So at any given time (as an example), I don't care if I get blueberries, blackberries, or strawberries. If strawberries are in season for $1 a tray, I'll buy a few trays of them over blueberries (or vise versa). Same with meats. If pork tenderloin is on sale for $2.50 a pound and chicken breasts (on the bone) is $2.99 and NOT on sale, I will wait for the following week for the chicken breasts and buy the tenderloin this time. Because I know the rotation of chicken breasts will be about $1 a pound at least once a month. So I'll have both in the freezer or fridge (both pork tenderloin and chicken breasts). I don't buy things off promos unless I have to.
So when I say the Phoenix area grocery stores is competitive, I mean you will not see chicken on the bone for $0.99 a pound in my state. Nor $0.99 asparagus or $1.00 a tray of strawberries. So every time I go into a retailer for food in the Midwest, I pay "retail". Their deals are not nearly as good. I focus shopping for deals on fresh produce and meats. When you shop for the deals in these two categories, AZ destroys the pricing as compared to MN. I get sticker shocked every six months.
As for the staple items. Once every other month I will shop here Surprise | Store | 99 Cents Only . They have name brands staple items as well as generic and priced as good as Aldi's. The store is 3 times bigger too. Still, I would not buy frozen meats and rarely produce there (maybe cilantro or tomato). IMHO, I am not impressed with either the 99 cent store or Aldi's produce.
I agree that Aldi's will do just fine in PHX. My point is, I'm not excited for their possible arrival in PHX. But if an Aldi's came to my northern MN lake town, I would be excited. Here in MN, no one has to work very hard to get you into the store as they have decided NOT to fight as hard.
Also, happy hour pricing in AZ are more competitive too. I'm allergic to retail. So my total food and restaurant bill is a good deal less in AZ. If I wasn't shooting for deals, I would argue that the grocery prices and restaurant prices are not that far off between the two areas. But I shop differently than most people.
I can't tell you how much I miss Aldi and Lidl... hoping so bad they'll open up stores here and not only the DC.
We would be lost without our Aldi's here in AR. As for Lidl's, never have seen one, but know they have jsut opened a few on the east coast. we love the "no frills" and good savings philosophy of Aldis.
$20 says that'd never happen here even if it really happens as you say elsewhere <bold>. They'll chase carts just like every other store in AZ does...
''believe me, they will. I have never been to an ALdi's and seen a cart anywhere but where they belong. I know what you mean, but for some reason, the type of person who shops at Aldi's is the type that will return the carts to get their quarter back.
We went through the discount grocery thing a few years back. There were several of them that popped up where the food was in boxes on the shelf, you had to bag your own etc. They went out of business maybe because of WalMart but possibly because people here are sort of lazy that way. Phoenix is the land where no one does anything themselves. They pay to have landscaping, pool maintenance, house keeping, and dog bathing. It also could be tht the shopping experience was ghetto. In any case, I prefer self-checkout, but I am not going to some dirty store that has a parking lot full of oil slicks from leaking junkers, with boxes piled all over the floor, and rub elbows with low-lifes just to save a couple bucks on groceries. Our area Walmart is clean, seems safe, the clientele is mixed but generally reflects the affluence of the area. I'll go there when I can and bite the bullet and get gouged at Safeway when its too inconvenient to make the trip.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Time will tell. 
