Aldi's Products Are Pretty Good — Here's One Key Reason Prices Stay So Low

Low prices don't always mean low quality, and Aldi is a great example of that. Known as one of the best grocery chains for budget shopping, Aldi offers many high-quality products. But how does the retailer keep its prices low without compromising quality? Over 90% of items Aldi sells come from its private brands. According to its website, "ALDI-exclusive brands allow us to provide the same high-quality product without passing on all of the hidden costs associated with the national brands, such as marketing and advertising."

Aldi can therefore stay in control of its pricing and keep the margins smaller, offering cheaper products without cutting any corners on the quality. It's also why you'll rarely find name brand groceries at Aldi. Another benefit is that the private brands are only available in its stores, creating exclusivity and building the kind of customer loyalty that can easily rival big brand names.

Aldi doesn't completely close the doors to big-name brands, though. "We also may carry a national brand if we are not able to procure an exclusive brand product that meets or exceeds the quality and taste of the national brand," the company admits, showcasing that quality is indeed the priority, even if it occasionally means having to share the profits with a bigger brand.

Private labels are a key part of Aldi's low-cost strategy, but they're not the only way the store can afford to keep its prices down. Aldi's focus on efficiency sets it apart from other grocery stores — and cutting down its unnecessary labor costs is a big part of that. Aldi doesn't need employees to collect and organize the shopping carts because, by charging 25 cents, the shoppers are incentivized to do that work. You also won't find any employees bagging your groceries, greeting you at the door, or manning the deli counter. These are all common positions that many other stores invest in, but Aldi doesn't find them necessary to keep its operations going. That's the reason you don't see many employees at Aldi, and it's also part of the reason it can keep it's prices so low.

Simplicity is the name of the game for Aldi, and this philosophy extends to the physical stores and keeping its prices low. The buildings are small, so they're less expensive to run than massive supermarkets. The interior doesn't have decorations, and there are no special displays promoting specific brands, allowing the store to save money, which is reflected in its prices. Even the products themselves are mostly stacked onto the shelves inside of the shipping boxes they arrived in, so refilling the shelves is quick and seamless, reducing the need for extra staff. This efficiency is distinctly Germanic and very different from how most American grocery stores run their operation. Funnily enough, it works for Aldi even in the States.