Thursday, October 16, 2014

What not to buy at Aldi

As my regular readers will know, I'm a big believer in Aldi. For those who aren't familiar with that name, Aldi is a bare-bones supermarket that sells mostly its own store brands. You won't find any frills there like free samples, free bags, or even free shopping carts; if you want a cart, you need to pay a quarter deposit to unlock it, which you get back when you return it after shopping. (This ensures that most shoppers return their carts, and the few that aren't returned get picked up by other keen-eyed shoppers eager to save a quarter, thus sparing Aldi the cost of paying employees to go round up stray carts.) The chain doesn't accept either coupons or credit cards; it's cash, debit, or SNAP (a.k.a. food stamps) only.

For those who are willing to put up with these minor inconveniences, however, Aldi offers some fantastic bargains. When Brian and I first discovered the chain, about five years ago, we were blown away by how cheap the breakfast cereals were, even compared to other store brands. (Aldi's Millville Raisin Bran is only $1.60 a pound, a price we never find elsewhere without stacking sales and coupons.) From cereal, we gradually branched out into other staple foods, including oats, peanuts, chocolate chips, cheese, and more recently, OJ and milk. Produce is less consistent, as prices vary from week to week, but when they're good, they're better than anyplace else's. I would venture to guess that buying our staples at Aldi probably saves us more money on our grocery bill than any other shopping strategy we use.

So you can only imagine my surprise when I came across a story today at Daily Finance saying that Aldi isn't the cheapest chain to shop at. In fact, in a comparison of six discount retailers, it's actually one of the worst. The study, done by Kantar Retail, compared prices for 21 products, including "edible grocery, non-edible grocery, and health and beauty aids." For the entire basket, Dollar General came out on top, closely followed by Walmart and Family Dollar. Aldi fell second from the bottom, with only Target doing worse.

How did this happen? A closer look at the numbers shows that Aldi's Achilles heel is apparently health and beauty aids. In the "edible" category, Aldi actually beat its competitors handily; its foodstuffs rang up at only $11.40, while its competitors' prices ranged from $13.20 to $14.79. Its prices for "non-edible groceries" were middling: $12.44 on a scale that ranged from $9.26 to $19.97. But for health and beauty, it came in dead last, at $14.05—nearly three times as much as the $5 total for the same items at the two leading stores.

It was comforting to know that we haven't been overspending all these years buying our edible groceries at Aldi, but I was still puzzled to see that it did so poorly on health and beauty. I haven't tried very many items in this category from Aldi, but the few that I have bought, like multivitamins and facial cleanser, have all looked like really good deals. Unfortunately, the press release on the Kantar Retail site doesn't say exactly what items the researchers included in their market basket, and I'm not willing to pay for a copy of the full report just to satisfy my curiosity. But since we already had a trip to Aldi planned for this evening, I figured I could do the next best thing: come up with my own list of health and beauty items that we buy regularly and check the prices for myself.

After a quick search of our bathroom, I jotted down a list of 11 items: multivitamins, toothpaste, deodorant, bandages, shampoo, conditioner, ibuprofen, antihistamines, cotton swabs, bar soap, and body wash. (That's probably more than the Kantar researchers included in their basket, but I figured it couldn't hurt to be thorough.) After we finished our regular shopping at Aldi, I went to hunt down these additional items and check their prices.

It took me a while to find the "health and beauty" section, since it was quite small and tucked away at at the end of an aisle. Even once I managed to track it down, there were a couple of items on my list that didn't appear to be on the shelf at all. But as I scanned the items they had, I quickly realized why Aldi's prices on them were so much higher than the other stores': unlike most of the items sold at Aldi, they were nearly all name brands. There were a few Aldi-branded items, under the label "Welby Health," and these actually did appear to be competitively priced: $1.39 for 375 cotton swabs, $3.79 for 100 daily multivitamins, and $1.99 for 100 ibuprofen tablets. But most of the items were well-known name brands, like Old Spice deodorant ($2.99), Pantene shampoo and conditioner ($3.69), Dove body wash ($5.39), and Crest toothpaste ($2.89). Moreover, in most cases, there was only a single name brand available, so consumers shopping for these items at Aldi can't compare prices and choose the cheapest option. The only choices are take it or leave it.

So it looks like a better answer to the question of what you should and shouldn't buy at Aldi, in order to get the most bang for your buck, is simply, "Buy the store brands." Any of Aldi's house brands—Millville cereal, L'Oven Fresh baked goods, Simply Nature organics—is likely to be a better deal than you'll find anywhere else. However, for the few products at Aldi that are name brands only, you're almost certainly better off looking elsewhere.
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