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Posted: 6:00 a.m. Thursday, Dec. 6, 2012

Smaller stores, private labels are the future of grocery

Fresh & Easy to leave the U.S. after spending nearly $2 billion



By Clark Howard


Discount grocers are on the march around the country, but some get a warmer reception than others.

British grocer Tesco is retreating from the U.S. market after they spent nearly $2 billion trying to launch their Fresh & Easy brand. Like their name suggests, Fresh & Easy stores had a focus on freshly prepared food and were smaller than your average grocery store.

It was an idea I loved, but it didn't have legs in the marketplace.

Meanwhile, a new location of Trader Joe's recently opened in Naples, Florida, and people were so excited. Now there are actually petitions circulating around to get Trader Joe's to come to other cities in Florida. The company just has that kind of mojo.

At the same time, Aldi plans to open in a suburban Houston location. According to The Houston Chronicle, the locals were having demonstrations and doing petitions to try to keep Aldi out! Those people who are upset claim that Aldi will lower property values, increase traffic, and put their safety at risk.

The funny thing is both Trader Joe's and Aldi have common ownership and a similar business model. There's an emphasis on private labels and a limited selection. But Trader Joe's is fresh and hip with a focus on organic and natural, while Aldi is just about inexpensive groceries.

It's just funny how people react to Aldi when in reality, if those people visited an Aldi, they'd see a clean, well lit store and clean parking lots. As far as the idea of bringing in the wrong people, I say look at the cars in the parking lot. You'll see both luxury cars and beater vehicles. Aldi appeals to both the rich and the poor, while typically leaving out the vast middle. That's nothing to hate on Aldi about, though.

This idea of specialty discount grocery stores is not going away. These are supermarkets of the future, as we move away from the huge traditional supermarkets.