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Aldi and Walmart are both known for their low prices and good deals, but which one is better overall? Read on to find out!
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As we all know, grocery shopping is one of the most essential things in our daily lives. But with prices skyrocketing the past couple of years, many consumers have had to adjust their budgets and shopping habits. Grocery shopping can chip away at our checking account balance if we are not careful about what we buy and where we buy it from. Aldi and Walmart are two popular retail giants that offer a wide variety of products at competitive prices. Both are known for their low prices and good deals, but which one is a less costly choice?
What is Aldi?
Aldi is a Germany-based discount retailer with close to 2,000 store locations in 36 states.
Aldi claims its prices are 50% less than traditional supermarkets. Independent research in markets like Houston and Chicago revealed that Aldi’s prices are around 15% cheaper than Walmart.
As a result of its lower prices, Aldi was the fastest-growing grocery chain in the U.S. last year and it became the third-largest grocery retailer by store count. Walmart and Kroger hold the No. 1 and No. 2 spots, respectively. In terms of sales, Aldi is ranked 4th with revenue around $135 billion, according to the National Retail Federation.
How Aldi keeps its prices low
Aldi is known for its privately-branded, low-cost items. More than 90% of the grocery products Aldi sells are Aldi-exclusive products. Aldi’s in-house private label eliminates the extra expenses associated with big name brands like advertising and marketing.
In addition to avoiding brand names, Aldi cuts expenses by stripping down the shopping experience, similar to a Trader Joes. Aldi only stocks around 1,400 items. This is even less than Costco, which typically carries about 4,000. This means the stores are smaller, keeping the cost of rent and labor down. In comparison the average supermarket carries around 40,000 items and Walmart supercenters carry more than 100,000.
Aldi displays products in their original cardboard shipping boxes instead of individually stacking them. This saves employees time spent stocking shelves. Aldi also doesn’t advertise as much as its competitors, and customers have to bring their own bags and even rent their shopping carts. These savings are passed on to customers, keeping prices low.
What is Walmart?
Walmart is the world’s largest retailer with about 10,000 stores and 600 Sam’s Club locations in 20 countries. Walmart is also the world’s largest private employer, with 2.1 million associates around the world and about 1.6 million in the U.S. alone.
In 2022 Walmart’s total revenue was approximately $538 billion, nearly four times that of Aldi, which brought in about $135 billion. Walmart also carries its own private label items, found under the brand names Great Value, Member’s Mark, Marketside, Freshness Guaranteed, Ol’ Roy, Parents Choice, and more.
Walmart is known for its large supercenters that stock pretty much everything, 70 times more than Aldi. A Walmart Supercenter is also about 15 times larger, at 178,000 square feet, than Aldi, which averages 12,000 square feet. (For comparison’s sake, Costco warehouses average around 145,000 square feet.)
Walmart is able to offer low prices due to its massive size and volume of sales allowing the retailer to purchase products in bulk. Additionally, Walmart has invested heavily in technologies that help it streamline operations, reduce waste, and improve efficiency. Ultimately, Walmart’s ability to offer competitive pricing is due to expertise in logistics and supply chain operations.
Price comparison
Here is a price comparison of different grocery items online in the Los Angeles area. To get a true comparison, the prices reflect the private label brands from each store. Prices vary based on region.
The verdict
When adding up the by-unit cost of these specific items, Aldi was about 10.4% cheaper than Walmart. However, the savings depended on the product. Aldi was cheaper for produce and certain meats, as compared to pantry items. Aldi’s low prices also tend to be consistent, so you can expect to save every time you shop there.
However, even though Aldi might be cheaper than Walmart for many of its items, Walmart often offers discounts on its products. This means that if you are savvy and take advantage of these deals, you could end up saving more money at Walmart. Additionally, Walmart is known for having a wider variety of products compared to Aldi. So, if you’re looking for something specific that Aldi doesn’t carry, Walmart could potentially be your best choice.
When it comes to shopping at Aldi and Walmart, both places come with their pros and cons. One major difference between the two is the shopping experience. Aldi stores are smaller, and it has a no-frills shopping experience. This is because Aldi aims to keep costs down. Walmart, on the other hand, has larger stores, a wider variety of products, and a more traditional supermarket shopping experience. All this, while still providing products at an affordable cost.
While Aldi and Walmart both are great options for grocery shopping, it ultimately comes down to personal preferences and what you value the most. If you are looking to stock more in your savings account, Aldi may be the better option, thanks to its low prices and consistent quality. However, Walmart may still be the better choice when it comes to finding a wide variety of products and taking advantage of discounts. Additionally, when it comes to the overall shopping experience, Walmart provides a more traditional ambiance, whereas Aldi offers a bare-bones shopping experience. Ultimately, choose a store that aligns with your needs and budget, while still providing quality products at an affordable price.
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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has positions in and recommends Apple, Costco Wholesale, and Walmart. The Motley Fool has a disclosure policy.
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