Business

More Americans Turning To Discount Grocer As Prices Skyrocket

REUTERS/Joshua Lott

German-based grocer Aldi has seen an uptick in its American business over the last year as inflation continues to weigh on consumers, according to The Wall Street Journal.

Aldi saw a 26% increase in foot traffic at its stores in March year-over-year, which was greater than the 6% increase at Kroger and the 15% increase at Trader Joe’s, as consumers look for cheaper prices, according to the WSJ. Elevated inflation has continued to weigh on Americans’ wallets, with prices rising 3.5% for the year in March and increasing18.9% since President Joe Biden first took office.

Measured through a basket of 50 items typically bought by Americans, Aldi was around 6% less expensive than competitor Walmart in the first quarter of the year, according to the WSJ. The store has around 2,400 locations in the U.S. and is adding more through its acquisition of around 400 competing Winn-Dixie and Harveys Supermarket stores.

Aldi takes a number of measures to reduce operating costs and lower prices for consumers, such as carrying only 2,000 separate items compared to the more than 31,000 average that supermarkets carry — lowering store size, resulting in cheaper rent, and lowering purchase costs due to bulk buying, according to the WSJ. Labor costs are also optimized through efficiencies like placing the shipping container directly from the distributor onto the store shelves so that employees do not have to unload items.

US Food prices have risen by almost 17% in nearly 4 months.

This is a level comparable to the 2023 average.

Yet another example of the recent inflation rebound. pic.twitter.com/JofSUF7IEw

— Global Markets Investor (@GlobalMktObserv) April 26, 2024

The company has been growing rapidly, adding around 100 stores a year over the past 10 years, and plans to add 800 more in the U.S. by the end of 2028, according to the WSJ.

Debt held by Americans has continued to surge as consumers struggle to adjust to rising costs, with total debt for households increasing by $212 billion in the fourth quarter of 2023 to a total of $17.5 trillion. Credit card debt reached a new high of $1.13 trillion in the fourth quarter, up $50 billion from the previous quarter.

The Federal Trade Commission (FTC) in February challenged a planned $24.6 billion merger between Kroger and Albertsons. The FTC argues that the merger would result in price hikes due to a loss of competition.

Aldi and the White House did not immediately respond to a request to comment from the Daily Caller News Foundation.