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Is there hope for good urban Aldi stores?
Submitted by Filmanowicz on Tue, 03/04/2008 - 10:50am
Both Aldi and Trader Joe's make the most of their square footage, creating worthwhile shopping experiences at around 15,000-18,000 square feet -- quite a contrast with street-killing, 200,000 square foot Wal-Mart superstores.
The stock selection logic at the two German-owned siblings is similar and canny, just adjusted to different points on the price-taste spectrum. Trader Joe's dispenses with almost all name brands, instead selling the impression that everything in the store -- whether it's TJ's brand of olive oil or arugula, exotic imports or its drinkable 2-buck Chuck wine -- is carefully selected by value-obsessed expert tasters. Aldi's product presentation may look random but the store reliably stocks a wide array of its own lookalike brands, all stamped with Aldi's double-money-back satisfaction guarantee. As at its cousin, you get the impression that someone with tastebuds (and an impatience with crap) makes sure that the quality is near to that of brands by Kraft, Smucker's, General Mills, Procter & Gamble. The slightly-less-drinkable wine there is Winking Owl and it really is 2 bucks. If you can put up with ultra-drab decor, long waits behind cupboard-filling customers and paying for bags (or bringing your own) -- it's a satisfying place to save 75c to $1 per item on boxes of cereal, jars of peanuts, jelly, eggs, cat food, garbage bags etc. My wife and I usually take our savings from there and apply them to treats at local bakeries, farmers markets, co-ops or whatever. And there's even fledgling lines of near-gourmet products such as organic chips, fresh salsa, big cartons of plain yogurt.
As Michael Malak has pointed out on the pro-urb listserv, there are plenty of examples of Trader Joe's stores that contribute positively to mixed-use town centers and hot city neighborhoods. Here's an image of one in a town center in St. Louis Park, MN, where the store fronts onto a tamed suburban arterial street.
It's tempting to hope Aldi could perform similarly in more downscale city neighborhoods. The chain is clever in many ways, like a fox in pig's clothing. Its policy of charging 25c for grocery carts, for instance, creates an efficient parking-lot economy that completely eliminates the problem of carts scattered all over the property, or worse, all over the neighborhood. Its store design today screams out its obsession with the bottom line but it could upgrade its urban design without a big financial outlay and send a message about discriminating value that's closer to what the chain is all about.
Thanks to some pressure from city planners, the store nearest me in Milwaukee has no setback and has a few windows on the sidewalk, plus a fairly big parking lot to the side of the building. It's about average for its industrialized, semi-walkable neighborhood. See a not-so-great photo of this not-so-great building, below the image of the MN Trader Joe's. A better urban design effort could help the chain get a warm welcome in a range of city neighborhoods, instead of getting the cold shoulder that Dennis McClendon observed in Chicago.
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I'll snap a few shots of Aldi stores and post them soon
In the meantime, a smart blog named The North Coast about Rogers Park in Chicago -- which happens to be home to CNU CEO John Norquist and planning director Heather Smith -- has a photo of and a posting on a spiffy looking (bur perhaps strangely windowless) urbanized Aldi store in that neighborhood. It's part of a larger, TIF-financed brownfield development that will also include a Target store, so apparently either the developer or Aldi or both were willing to play ball on a better design to win neighborhood approval. I'll ask Heather or John to chime in about how design figures into the approval process in the neighborhood.
Photo from The North Coast.
Uptown, actually
That's the new Aldi at Wilson Yards, near Broadway & Montrose in Uptown -- which used to be a CTA railyard, right in the middle of what was once one of Chicago's busiest neighborhoods. That development has been mired in controversy (as one might expect in that hotly contested neighborhood) for decades.
Both Aldi and Trader Joe's have a way of finding the least likely real estate in their area and making their stores fit the space, rather than the other way around; another way of keeping costs down, I suppose.
(I think it's funny how the same retail strategy, under one owner, can play out in such different ways! My personal favorite Aldi buys [it's two blocks from home] are AOC French wine, German 70% cocoa dark chocolate, and soft chocolate chip cookies, all equivalent in quality but half the price of the mom & pop yuppie "market" a block away. However, the lines are much shorter and faster, and the lighting vastly superior, at the market.)
Uptown Store Misses Mark
Design-wise, the Uptown store unfortunately just misses the mark. I thought the original design had an entrance on the street side, but you'll notice in that picture that what looks like it should be the entrance doesn't have doors. Everything else in this neighborhood faces the street, but this building unfortunately turns its back on the street, placing the entrance on the parking lot in the rear. It's most disappointing because I seem to remember my Aldi in Germany fitting into the neighborhood perfectly. I wonder why they can't do that here.
I'm placing my bets on Tesco to reform urban groceries in the U.S.
smaller formats
Tesco isn't the only one experimenting with a smaller footprint store. Supervalu operates Save-a-Lot, which they call "the nation's leading extreme value, limited-assortment grocery chain." They've just folded an experiment (called Sunflower Market) that brought a similar approach to natural and organic food; the average store was about the size of a Trader Joe's, with 8,000-12,000 SKUs in 12,000-16,000 square feet. That's also about the same size as Tesco's Metro and Fresh&Easy stores.
Tesco has done very well with its much smaller (3,000-4,000 square feet) "express" format in Europe and Japan, but they'll also readily point out that houses there are much smaller than in the USA. Thus, people can't stockpile mountains of goods every week or every few weeks; they really do have to shop more frequently. Such shopping habits are so well ingrained in some societies that Wal-Mart has given up on Germany and is struggling mightily in Japan.