Tag Archives: Aldi

Shopping for cheaper goods appeals to more people in the Great Recession

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The AP reports that more Americans are willing to be frugal in the their shopping and shop at places, like Goodwill or Aldi, that they wouldn’t have considered before the Great Recession:

And it’s not just about Goodwill. Americans, even those with jobs, are shopping for brands, buying at stores and eating at restaurants that they shunned before because they are trying to get more for their money.

At the supermarket, shoppers are buying more store-labeled products, like no-name detergents and cereal, and not returning to national brands.

And in a telling trend, Americans are turning to layaway more often when they buy expensive items such as engagement rings and iPads. The wealthy are also using layaway more often, a drastic change from the past.

This story seems plausible – but can’t we get any data in the story to back this up (beyond the 11% in revenues for Goodwill)?

Some questions about this trend:

1. Will this change when the economy picks up again? Is this just a short-term response that people will abandon once they have the ability to again shop elsewhere?

2. How much of the stigma of this kind of shopping once existed and how much has been removed? Is stigma just measured by the willingness of people to shop at such places? Where does this stigma come from – people seeing other people shopping, people seeing goods in the homes of their friends, or something else?

3. Are there certain areas where people haven’t picked up on this trend? Are certain people particularly resistant to this?

4. What are the income levels that this applies to? What is the rough cut-off where people still wouldn’t shop at these places or use these more frugal practices?

The real Trader Joe’s

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An interesting story at CNNMoney.com goes behind the scenes at Trader Joe’s. This trendy grocery store certainly has its fans; I had one friend in graduate school who seemed willing at times to drive 2 or 3 hours to shop at one.

Some of the details about the company:

Few customers realize the chain is owned by Germany’s ultra-private Albrecht family, the people behind the Aldi Nord supermarket empire. (A different branch of the family controls Aldi Süd, parent of the U.S. Aldi grocery chain.) Famous in Germany for not talking to the press, the Albrechts have passed their tightlipped ways on to their U.S. business: Trader Joe’s and its CEO, Dan Bane, declined repeated requests to speak to Fortune, and the company has never participated in a major story about its business operations.

Some of that may be because Trader Joe’s business tactics are often very much at odds with its image as the funky shop around the corner that sources its wares from local farms and food artisans. Sometimes it does, but big, well-known companies also make many of Trader Joe’s products. Those Trader Joe’s pita chips? Made by Stacy’s, a division of PepsiCo’s Frito-Lay. On the East Coast much of its yogurt is supplied by Danone’s Stonyfield Farm. And finicky foodies probably don’t like to think about how Trader Joe’s scale enables the chain to sell a pound of organic lemons for $2.

Companies are often made or broken based on their image and it sounds like Trader Joe’s want to keep a low corporate profile while building upon its popular name.

A question: would the store’s loyal customers not shop there any longer if they knew where the food really came from? Or knew more about what happened behind the scenes?