A Social and Monetary Experiment

by albertopolintan

November 16, 2014 at 1145AM

For the last month I’ve run a little experiment. It involves a couple of grocery chains – my current choice (Woolworths) and a new-old player, Aldi. My intent was really to find out if there was any real difference between the two and if there was anything compelling for me to stay loyal to one or another.

The genesis for the trial really was because of the opening of a new store near me and I was curious about this incredible growth from the German chain.

During four distinct weekends, here are my general thoughts on the two:

Price – trying Aldi out really opens your eyes to how high grocery costs can be in Australia. I would say that my weekly shop is fairly similar each time and there is a significant difference when shopping German. Sure there are hardly any name brands at Aldi, so decision making is largely about the functional need (cookies, peanut butter, milk, butter) rather than internal satisfaction or social cred. If I were counting in grocery bags, Aldi buys 30% more stuff for the same dollars at Woolworths.

Quality – since there are no or hardly any name brands at Aldi, there is some reticence about what you’re buying. Unlike the private label brands at Woolworths, the Aldi brands don’t necessarily work too hard at imitating leaders (well, most of the time). So, it’s hard to judge from the cover. That said, the products are reasonable. I tried tinned tuna, an organic (plain) pasta sauce, crackers, and peanut butter and all were no different from the name brands I would have purchased from the Australian chain. There were some notable quality differences in taco kits and cookies & cream ice cream in favour of the branded products. In all, for the very basic products, there is no real discernible quality difference.

It is worth noting that the fresh fruit available at Aldi is very good compared to Woolworths. Blueberries, cherries and mangoes were similar or better quality and with the price difference, the German is the better option for this.

Shopping Experience – the comparison here may not be so fair since the new Aldi store was a greenfield site. You walk in and it smells like a new air conditioner has just blasted its first breath of frigid air. It’s artificial, chilling to the nostrils and smells like the industrial plastic clingwrap on newly delivered white goods. Also, the geographic catchment is different compared to their more established haunt. This one is located in an ever so slightly more upward market and it shows in the number of expensive European cars in the carpark.

Aldi has far less stock, fewer aisles and is less taxing once you know where everything is. The first visit is daunting because the layout is unfamiliar and you can’t find the brands you know to shortcut decision making. There is a little bit of learning involved and just a slight hint of fear of the unknown. That said, a store with four longish aisles is easier to navigate and the seated cashiers flying through checking out your goods is almost welcome. There is a greater functional purpose to Aldi – less evaluation needed between this discounted item and the other one. That usual pricing structure of good, better, best isn’t here. There’s usually just one choice for a given category and once you’re comfortable with it, filling that shopping cart is quickly automatic.

Oddly, it also feels like there’s more light at Aldi. I’m not sure why that’s the case. Is the roof higher? Are there more windows? It feels less claustrophobic. That is nicer but that synthetic smell of air conditioning running at full bore just makes you want to get out as fast as possible.

Social Cred – perhaps it’s this that limits people from switching to Aldi. Being seen might box people into a profile they don’t want to be in. I think Aldi’s first promise was to be cheaper. On this they deliver and therefore attracted a customer base looking to eke out as much per dollar. Did I feel a little embarrassed shopping there? Yes, just a little, but that slowly fades with familiarity and habit, particularly when the fruit quality is so good. I would still find it a bit weird if someone looked through my pantry and found no name brands since we’ve been trained so long to use those as symbols of who we are.

I once came across someone I knew at the Aldi and I think we both had that slight sense of awkward embarrassment upon seeing each other. We both never expected the other to be there but also wished not to be seen. There’s a lot of signalling about shopping at the store, especially given its past. Will people get past this with time? I think it would depend on the continued patronage of the store. The one near me is certainly a different demographic compared to the other more established stores, so with that I’m guessing it might change, just not so soon.

Other Bits – there is one significant difference between the local and the import and it’s the loyalty program. Woolworths offers their Everyday Rewards program which is supposed to build loyalty by giving shoppers offers that would theoretically bond them to their grocery store. I’ve played with this program by trying to buy erratically  – tonnes of cat food one week, a standard shop the other. To date, I haven’t received anything that might make me want to buy at Woolworths more often because they know me better.

In the past I had received a cat food sampler (so buying $40 worth of cat food in one week did trigger something) and a pre-loaded debit card (which I earnt by buying over a certain amount for four straight weeks). Other than that, I haven’t received a set of offers that makes me say, “Yes, these guys know my needs before I do, so I’ll keep shopping there”. There have been booklets of coupons and other online activations but I can’t say they were compelling.

Still, I do hold some hope for the loyalty program. Data accumulation shouldn’t be the problem but making sense of it. You’d hope that they could hire some people who could do a good job of that.


 

Overall, shopping at Aldi or Woolworths really doesn’t make me feel any better about either one. It’s largely a monetary decision. When I see that my dollar goes further with Aldi and that the quality isn’t so bad, I’m still going to go there. However, that doesn’t mean exclusivity. There are still some things that only Woolworths does well, so I’m still need to visit.

By adding another grocery store to fulfil my weekly shop, the notion of more choice actually doesn’t make things any easier.

 

Advertisements