The United States has entered the era of the national supermarket chain, as Safeway, Kroger and SUPERVALU have expanded into multi-regional operators while maintaining locally recognized banners.
Emerging from the pack, however, are three retailers who use the same name in every market: Whole Foods Market, Aldi and Trader Joe’s, the last just missing the power player chart because its $7.3 billion estimated sales aren’t quite 10 percent of category leader Kroger’s $77 billion. Whole Foods may not have a presence in every major market and Aldi hasn’t moved all the way west, but they do continue to grow in the face of increased competition from alternative food retailers ranging from Walmart and Costco to dollar, drug and convenience stores.
Operating in an inflationary environment where year-over-year food prices rose 6 percent, according to The Food Institute, Whole Foods and Aldi took entirely different paths in achieving double-digit sales gains. Whole Foods, which caters to affluent shoppers with its array of natural and organic offerings, did so well in the first half of its current fiscal year that gross margin increased from 35.6 percent to 36.3 percent and identical store sales increased 9 percent, the ninth consecutive quarter in which comps improved.
Aldi, the American arm of a German conglomerate that also controls Trader Joe’s, now has a presence in 31 states, operating stores much smaller than Whole Foods’ with a very limited assortment of groceries, not including the occasional television, air conditioner or other seasonal item.