Kroger just snapped a 13 year streak that could signal a shakeup to the grocery industry. Same store sales are declining for the first time in over a decade. Kroger blamed the lower prices in food for the decline, but that might not be all that is going on.
There’s a lot more competition these days for lower priced groceries. People are sick and tired of having to pay high prices for food or having to wait for deals to make certain purchases. Seemingly out of nowhere discount grocery stores like Aldi are opening everywhere across the US and taking the bigger groceries by storm.
It’s no surprise too when you actually go into one of these stores. They’re smaller so they’re easy to navigate. They have your everyday essentials, and they’re prices are lower than their competitors. Aldi doesn’t just Kroger beat on price, but they also beat out Walmart, the low price champion.
Aldi is expanding across the US.
If you don’t have an Aldi near your area yet, then you’ll likely have one the next few years or so. Soon enough they’ll be near a Walmart somewhere near you. I just had one open near me and they do have a great system, and I’ve been impressed with their products.
You’re not going to recognize any of their products unless you’ve shopped there before. They sell a lot of store brand products that beat the nationals on price while staying on par with quality.
Aldi isn’t the only grocer in town that’s taking out the competition. It seems that this smaller type grocery store with less overhead is working for other companies too. Trader Joe’s is another example of a grocery store with store brands and good prices. Although they may not be as cheap as Aldi on price they can still compete with their own image of being higher quality at an affordable price.
Walmart isn’t just going to lay over and die either though. The big giant is also investing in their grocery department while slashing their prices to stay competitive. They’re the king when it comes to lowering prices to beat out the competition so I’d expect more of that to happen.
Even more competition on the way
As if that wasn’t enough, consumers have even more choices to look forward to. There’s going to be a new grocery in town very soon on the east coast. The german supermarket chain Lidl is coming to the US this summer. They’re expecting to open 100 or more stores by 2018 with plans to open over 500 stores in the US.
Similarly in Europe there was some rapid expansion of Aldi and Lidl that disrupted the biggest grocery stores over there. More competition is great for consumers, but it’s going to get hard and ugly in the grocery business real soon in the US. Hopefully that will keep driving food prices down so everyone can afford to eat. In the meantime I wouldn’t be investing in this oversaturated industry right now unless you know something.