Paying a Quarter for a Shopping Cart, and Profit Margin Challenges
When you shop at ALDI, you need a quarter to use a shopping cart.
Don’t worry- you get the quarter back when you return it.
In fact, Amazon sells a nice ALDI quarter holder keychain, so you can always remember to bring a quarter when you shop. Nice!
What about grocery bags?
Well, ALDI has a kind- but firm- message on the website:
“ALDI encourages our shoppers to bring their own bags and to bag their own groceries at our bagging counters. Don’t have a bag? No worries! You can always purchase our reusable or paper bags for great prices at the checkout counter. Don’t forget to bring them on your next trip to ALDI!”
Bring your own bags, and bag your own groceries…
Here’s ALDI’s justification for the shopping cart and grocery bag policies:
“Here at ALDI, our stores are designed with savings in mind. We have a unique way of doing things..”
In other words: It’s going to require some effort on your part, but we use these policies to keep prices low.
What are ALDI’s cost savings?
No staff needed to move shopping carts, no baggers needed at checkout.
These cost savings are really important- because every dollar counts in the grocery store business.
Grocery store profit margins
The profit margin for a typical grocery store is 1% to 3%.
The good news?
Grocery stores have loyal customers and generate repeat business. I’ve gone to the same two grocery stores for 20+ years.
Repeat customers also spend more. Business.com reports that repeat customers spend 67% more than new customers. Another stat: “Adobe found that 7 in 10 shoppers consider themselves brand loyal after at least three purchases from the same brand.”
And why not?
The benefit of going to the same two grocery stores is that I know where everything is. It saves me time.
Wanna use Instacart instead? No problem- you have an idea what your grocery store has- which makes it easier to order from a delivery service.
The self-service revolution
I eat the same foods, go the same places, and buy the same things over and over.
And I’m noticing a trend.
I’m getting pushed into self-service by businesses. I don’t mind it, because it saves time and I can avoid weird and uncomfortable conversations with random people…
Three examples:
Panera: I always use the self-service kiosk. As this article points out: “Panera was one of the first restaurants to embrace the new technology in the US, installing kiosks in half of its roughly 800 locations in 2015.”
Sit-down restaurants: You scan a code on the menu to order food, and they bring it. Less interactions with servers.
Sporting event concessions: Rather than go to a counter and order, you pick food and drink out of refrigerators, scan them, and pay for them. One employee stands by the scanner to help you. (The lines also move much faster).
Many people prefer using a kiosk. Consider this restaurant industry stat:
Consumers were asked “what style of dine-in service they prefer. The options were traditional service from a waiter, or ordering and paying with a tableside tablet or mobile app.
More than half (52%) of Gen Zers said they’d prefer the latter option. Forty-five percent of millennials agreed.”
Technology will continue to reduce the number of employees needed, and AI will accelerate the trend even faster.
The company benefit?
Lower direct and indirect costs.
Lower costs, higher profits
Direct costs are defined as cost that can be directly traced to a product produced or a service provided. When a server at a restaurant is replaced (in part) by a kiosk at the table, the restaurant needs less total labor to serve the same number of customers.
Indirect costs, on the other hand, cannot be directly traced to a product or service. Instead, indirect costs are allocated, based on an activity level (labor hours, machine hours, etc.)
A grocery store employee who gathers carts in the parking lot and brings them back into the store is an indirect costs.
In both cases, lower labor costs increase profit margins.
Food for thought.
Margins are tight in grocery, so shoppers feeling extra tasks like carts and bagging makes sense even if it’s a small hassle. You could try Loyally ai to turn those repeat trips into points or perks, nudging more return visits without adding much overhead. That way the store keeps costs lean and customers feel like they’re getting a little something back.