Why Aldi Is at the Sweet Spot of Food Retailing

Progressive Grocer talks with VP Joan Kavanaugh
Lynn Petrak, Progressive Grocer
Joan Kavanaugh
Joan Kavanaugh, VP of national buying at Aldi U.S.

Aldi has a certain cache among shoppers who eagerly anticipate the retailer’s seasonal offerings and who embark on discoveries for products as much as good deals. While striving to deliver on customer interests and expectations, the Batavia, Ill.-based company is also laser-focused on operations, whether making inroads on sustainability goals by pledging to eliminate plastic bags at its stores, continuing to expand its footprint across the U.S. or running the state-of-the-art Aldi Insights Center at its headquarters. (Fun fact: The Aldi Insights Center will be the venue for an upcoming wedding, courtesy of a “Happily Ever Aldi” promotion this summer.)

Progressive Grocer recently interviewed Joan Kavanaugh, VP of national buying at Aldi U.S. on how the shopping experience at Aldi is resonating with today’s shoppers.

Progressive Grocer: How is Aldi particularly well positioned to deliver on customer needs and interests in this operating environment? How do you hold the "sweet spot" with pricing and a satisfying shopping experience?

Joan Kavanaugh: Times are tough, and we know customers are counting on us to deliver amazing products at even better prices. We have always cut out unnecessary costs across our entire business, which creates tangible savings that we can pass along to our customers. The things that make us different are the things that save our shoppers money, and that’s what allows us to withstand market fluctuations better than our competitors.

Examples of our money-saving business model include a thoughtful small-format store that allows us to utilize fewer staff and resources, and a self-return cart system that saves our employees time, so they can focus on our customers and the store instead of chasing carts in the parking lot. We also offer a curated range of the most popular products and Aldi-exclusive brands to take the guesswork out of product selection, and 90% of the products in our stores are private label. Customers are looking to Aldi brands to save money without sacrificing quality. And there is efficiency in every aspect of our store operations, from how we stock our shelves to how we run our checkout process.

PG: We've noted that Aldi is a banner that resonates well with younger shoppers, including younger Millennials and Gen Z consumers. Have you also noted this in any of your shopper insights, and to what do you attribute this store interest and loyalty?

JK: One of the best things about Aldi is that our shoppers span all ages, locations and income brackets – we serve anyone who likes to save money. While we have a passionate fan following, we haven’t won over shoppers’ hearts on just price alone. Customers check out Aldi for the first time after hearing about our prices, but they keep coming back because they like what they’ve found, which is award-winning, shopper-endorsed groceries and a rotating selection of amazingly fun items, our Aldi Finds.

PG: By taking eco-conscious steps like eliminating plastic bags, curbing food waste and installing solar panels, how do you balance the needs of the business during a challenging economic time with the need to do the right thing from an environmental standpoint?

JK: We’re proud of the work we have done in making sustainability affordable. We know these are extremely challenging times. However, we also know our customers care about sustainability just as much as we do. We’ve worked hard to ensure we aren’t compromising in any areas of our business. Balancing sustainability and the needs of business can be hard, but we have designed our business to save our shoppers money and that won’t change as we move towards being a more sustainable retailer. As customers are faced with the rising costs of life, we want to ensure they don’t have to choose between sustainability and saving money.

PG: Can you share any sneak peeks for the holidays return of fan favorites, advent calendar, etc.?

JK: We just recently conducted our annual Fan Favorites survey, and the winners for 2022 are in. While we can’t share any sneak peeks into our holiday lineup, we can share that we have exciting Holiday Countdown Calendar news coming soon.

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