The ALDI food chain opened its first U.S. store in Southeastern Iowa in 1976 and has grown to over 1,400 stores from Kansas to the East Coast. There are also more than 9000 stores internationally. They’ve continued to expand rapidly even during difficult economic times. So, how do they do it?
ALDI has refined its business systems and processes over many years. Their philosophy—”to offer incredible value every day”—is rooted in the idea that less is more.
Lean Business Systems Cut Costs
ALDI only carries about 1400 frequently purchased grocery and household items. They build energy-saving stores, hire fewer employees, make better use of space, sell in case lots, and rely on customer self-service. Their vendors provide self-displaying cases, with pre-priced merchandise delivered on labor-saving pallets. Customers bring shopping bags, pack their own groceries, and pay with cash or debit cards only.
ALDI streamlines operations so that shoppers only pay for food—not frills. The systems and processes of their business are designed to remove unnecessary costs and pass the savings along to customers. This savvy retailer promotes everyday prices that are lower than supermarket “sale” prices, and their customers love them for it.
Good Business Systems Strengthen Your Brand
ALDI is especially well-known for its shopping cart system. Let me explain.
I am a part-owner of a home décor retail outlet. Years ago, I wanted to learn more about the business operation, so I decided to work in the 100,000 square-foot store during the busy Christmas season. Like other employees, I did anything I was asked by the store manager (except, I wasn’t paid). One of my duties was to move abandoned shopping carts from the parking lot into the store.
I’ve seen store personnel gathering shopping carts many times, but I didn’t realize what a miserable and never-ending task it was. I began thinking about how this chore might be made easier and shared several ideas with the store manager. It seemed like the least of his concerns.
Sometime later, I was impressed to learn how ALDI created a system to solve this headache. Their shopping carts are hooked together right outside the store. As customers approach, they insert a quarter to release a cart. When they finish shopping, they reconnect the chain to the cart and get their quarter back. With this system, ALDI doesn’t have to assign an employee to round up carts in the parking lot. They don’t lose expensive carts, and they don’t worry about runaway carts dinging up their customer’s cars. This expense-saving system has become a legendary part of the ALDI culture.
ALDI has many other impressive business systems, but you get the idea. Systems Thinking has enabled them to become very prosperous, even during difficult times. Their systems are customer-focused, take waste out of the operation, and provide a very pleasurable and unique buying experience. The ALDI folks really get it!
What are Your Remarkable Business Systems?
You can do the same thing with your company by first becoming clear about who your customers are and precisely what they want. Then create effective business systems and processes that deliver your products and services in such a remarkable way they would be a fool to buy from anyone else!