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W25572
ALDI AND WALMART: ON A COLLISION COURSE?1
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In 2017, the supermarket industry in the United States was a difficult one in which to make a profit.2 Winn-
Dixie Stores, Inc. and BI-LO had already filed for bankruptcy.3 More and more people shopped in
convenience and drugstores, not to mention Dollar General Corporation stores.4 Further, people’s buying
Educational material supplied by The Case Centre
habits had changed with online shopping and home delivery options.5 On top of that, Amazon.com Inc.
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(Amazon) entered the grocery business by acquiring Whole Foods Market IP, Inc. (Whole Foods) in 2017.6
However, when Greg Foran, the president of Walmart Inc. (Walmart) in the United States, described one of
its competitors as “fierce,” “good,” and “clever,” he was not referring to one of the large chains such as Kroger
Company or even Amazon. Foran was talking about ALDI SÜD Dienstleistungs-SE & Co. (Aldi), the German
discount grocery store that was rewriting the grocery industry rule book.7 Foran spoke from experience.
Walmart owned the UK-based Asda Stores Ltd., but Aldi and Lidl Stiftung & Co. KG had outpriced Asda.
Finally, Walmart threw in the towel.8 Could the same thing happen in the United States after Aldi’s move
across the Atlantic? Walmart would have to decide whether it should compete with Aldi directly with the
small-format stores it had introduced in 2011 or focus its resources on the emerging online hybrid model.
In 2019, the third-largest grocery retailer in the United States was Aldi, with more than US$15 billion9 in
estimated annual sales.10 Aldi had 1,900 stores in thirty-six states, doubling its store count from the previous
decade, mostly in upscale neighbourhoods.11 This starkly contrasted with the twenty-first century’s first
decade, when Aldi was known as the “food stamp store.”12 From being nearly invisible, Aldi began to assert
itself as a genuine challenger to the top echelon of US grocers. Since entering the US market in 1976, Aldi
had only opened 500 stores in 25 years. By 2021, however, Aldi was opening 130 stores per year.13 Many
observers noted that Aldi was setting its sights on Walmart and opening new stores close to Walmart
Supercenters. However, Walmart refocused its business beyond retail to focus on advertising and health
care.14 Was Aldi moving away from its successful business model by expanding its products and services to
attract upscale customers? Should Aldi continue its expansion even though Walmart was not doing the same?
WALMART
How Walmart Dominated the Grocery Store Industry
Beginning with a single Arkansas retail location in 1962, Sam Walton founded a company that would
become the largest grocery retailer in the United States, with food and consumable sales increasing to $370
billion in 2020.15
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In 1988, Walmart’s chief executive officer (CEO) and president, David D. Glass, opened the company’s
first Walmart Supercenters, combining fully stocked grocery stores and discount outlets. In 1993, Walmart
launched its Great Value store brand, which became the most significant food brand in the United States
by sales volume and covered more than 100 categories. Its packaged food items came from dozens of
suppliers. Under the leadership of Glass, Walmart increased its debt to finance the opening of hundreds of
Supercenters in the 1990s. This highly successful venture resulted in the company’s most profitable
period.16 In 1999, Walmart became the wealthiest and most prominent private employer globally.17 Much
of this success was driven by Walmart’s industry-leading logistics practices in its retail business.
Vendor-Managed Inventory: Walmart’s Competitive Advantage
Walmart’s objective was to restock the shelves just before products were expected to run out. This meant
that Walmart trucks would replenish the stores four times a week.18 Stated differently, instead of holding
inventory at the store level, Walmart’s products were constantly moving in its trucks or through its

distribution centres (DC) instead of sitting in stores. The trade-off was dramatically reduced inventory costs
offset by increased logistics costs.
Integrated Ordering
Walmart stores within a 300-mile radius of a DC integrated the ordering categories across the stores it
served, so vendors sent an entire truckload of pallets to the DC. The DC redistributed the pallets based on
the demand from individual stores.19 This was efficient for vendors if Walmart could precisely predict the
aggregate needs for the stores served by a DC. This process, known as cross-docking and first developed
in the less-than-truckload industry, moved full truckloads over large distances and then redistributed the
packages to smaller trucks for the last mile. (Other companies, such as FedEx Corporation and United
Parcel Service, had a similar process.)
In household goods, for example, integrated ordering meant that each category manager (thirty-six on
average) would coordinate with counterparts at stores served by the same DC. The category managers for
this group of stores were in constant communication through a dedicated internal communication network.
Further, ordering decisions were made at individual product levels (such as toilet paper) and rolled into
order for each category. Walmart’s internal fleet of trucks ensured that the stores were replenished with
their precise requirements four times a week. The stores calculated where and how to redistribute buffer
inventory by Walmart’s trucking fleet as needed (see Exhibit 1).20
This logistics process was formally introduced through co-operation between the Procter & Gamble
Company (P&G) and Walmart in the mid-1980s. P&G claimed that it had a much better idea about the
demand for its products, and if it had access to the point of sales (POS) data, it would be able to fine-tune
the integrated ordering to minimize buffer inventory and stock-outs. P&G convinced Walmart founder
Walton to give it access to the POS data from one Walmart store as a test case.21 The trial run was successful.
Walton then gave P&G access to the POS data for all Walmart stores. P&G became an integral part of the
ordering process, and it became the vendor’s responsibility to manage Walmart’s P&G brand inventory.22
The next step was encouraging all of Walmart’s significant vendors to adopt a vendor-managed inventory
(VMI) approach.23 This data interchange became possible only because Walton and P&G (and subsequently
other major Walmart vendors) arrived at an alignment of economic interest.24 The vendors agreed to adopt
VMI because it ultimately helped them become more efficient in their manufacturing and logistics
processes since they had greater clarity about when and what to ship to Walmart’s DCs.25 The importance
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of alignment could be seen by the fact that this became the industry standard as early as the late 1990s, even
though the benefits of such network efficiency became readily apparent during that decade.26 It was
estimated that this process reduced Walmart’s sales costs by nearly 3 per cent.27
How Walmart Lost Its Way
In January 2000, Glass, who had steered Walmart’s transformation since 1988, stepped down, and Lee Scott
was appointed CEO.28 In 2001, Walmart became the largest food retailer in the United States, when its
grocery sales reached $56 billion.29 Walmart’s stock price had risen tenfold during Glass’s tenure.30 By
contrast, when Scott unexpectedly announced his departure in November 2008, Walmart’s stock suffered
a loss of 20 per cent.31 Under Scott, Walmart underwent a significant international expansion and changed
its domestic operations.32
In early 2000, Scott decided to target more affluent shoppers above the core Walmart customers (those with
a household income of less than $70,000). This was primarily to counter the threat from Target Corporation,
which appealed to upscale shoppers. This initiative manifested as a significant sprucing up of Walmart stores,
with improved lighting and decor. Aisles were broadened (with reduced shelf space), which led to a 15 per
cent decrease in orders to vendors and staff numbers to keep prices low. Walmart also started to carry
fashionable, branded clothes at a higher price than the conventional casual attire that had been its mainstay.33
The other main change was that, for the first time, Walmart started offering sales, which it termed “rollback.”
Scott also embraced sustainability in a big way, insisting that suppliers bear the brunt.34 For its part, Walmart
moved to natural gas fuel for its truck fleet. Finally, Scott started offering organic foods at a premium.35
By January 2005, Walmart had lost its lustre with Wall Street because of declining same-store sales and
criticism over employee wages and benefits, development fights with local communities, lawsuits,
scandals,36 and a bribery probe.37 By 2020, Walmart had unwound almost all its international operations,
except in Canada and Mexico, and had significantly expanded into e-commerce.
It seemed that Walmart had walked away from its core customers, which gave stores like Aldi and Dollar
General the opportunity to make inroads into Walmart’s erstwhile customer base with small-format stores.38
Small-Format Stores
In 2011, in a likely effort to compete with stores like Aldi and Dollar General, Walmart started
experimenting with a small-format store called Walmart Express. In 2014, Walmart rebranded these stores
as Neighborhood Market stores. Walmart opened about 676 of these new stores between 2014 and 2018.
However, it also had to shut down 130 of them in the same time frame because they had been performing
poorly (see Exhibit 2).39
ALDI
The Rise of Aldi in the United States
Aldi (short for “Albrecht Discount”) was founded by brothers Karl and Theo Albrecht as a self-service
store in 1954 in Essen, Germany. Many of the unconventional aspects of the Aldi business model were a
direct result of the everyday survival needs of a war-torn Germany.40 For example, in the United States (and
in Western Europe), a typical Aldi store only carried around 1,400 primarily private-label products, rented
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its carts to customers, charged for bags used to package customers’ groceries, would not offer any customer
loyalty programs, and did not accept credit cards until March 2016.41 Similarly, Aldi had no mass media
promotions or public relations campaigns until 2017.42
In Germany, Aldi was regarded as the third-most admired corporate brand.43 Aldi systematically expanded
into new international markets such as Australia44 and Ireland.45 Starting in 2005, it aggressively expanded
into the United States.46 Despite all the seemingly unfriendly customer treatment, by 2022, Aldi was the
world’s sixth-largest food retailer, with a 2021 revenue of $121.1 billion and a net income of $968 million,
and 7,000 stores worldwide.47
Aldi was known as a hard discounter in Europe—a retailer that offered prices even lower than conventional
discounters.48 The trend toward price competition was further evidenced by the fact that over the past
decade, the market share for hard discounters in Europe had more than doubled and represented about 9.5
per cent of the total market.49
Aldi remained steadfastly focused on efficient operations and reducing costs to drive financial results.50 It
almost exclusively sold its own private-label brands and carried only 1,400 items in 2015 (up from 700 in
2004) in a typical store.51 Very few brands competed next to each other on the shelf.52 This allowed Aldi to
dictate its store layout, position the products, and control the quality and pricing through complex
negotiations with its suppliers. Due to Aldi’s sheer size, suppliers utilized the grocer as an avenue through
which to sell private-label products.53 The size effect was much more accurate in Germany but also became
a factor in the United States. Aldi employed non-unionized workers in its stores and kept staffing levels to
a minimum to conserve labour expenses.54 Most of the metrics Aldi used were geared toward increasing
labour productivity.55 These ranged from the number of shelves that could be stocked to the number of
items (forty) the checkout clerk was expected to process in one minute.56 This approach to staffing resulted
in long lines at the registers (albeit they moved fast), but customers seemed willing to wait in line when
three frozen pizzas could be purchased for $3.74 (based on 2015 prices).57 Aldi had metrics for all its
operations, including conventional ones such as inventory turnover.58
When it first entered the US market, Aldi was perceived as bottom-feeding, only appealing to customers who
desired low prices due to frugality or lower purchasing power.59 Its nickname was the “food stamp store.”60
Its focused product offering, small footprint, and minimal staffing allowed Aldi to be flexible in locating its
stores and reduced the investment costs of opening up a new location.61 Until 2004, when Aldi primarily
catered to lower-income customers, it used this flexibility to only open new stores close to its customers in
food deserts—areas with limited access to nutritious and affordable food.62 One of its first stores in Cleveland,
Ohio, was located at the border of East Cleveland and Euclid, close to large apartment complexes.63 Aldi
offered speedy shopping that was valued by low-income customers who often worked two jobs.64
However, as Aldi gained acceptance with shoppers, it began moving to more upscale Cleveland suburbs,
such as Lyndhurst.65 This expansion mode became regular practice, with a new Cleveland store opened in
the Steelyard Commons development to replace the Pearl Road store in a second-tier strip mall with no
food outlets and close to an apartment complex. Interestingly, the Steelyard Commons development also
boasted a Walmart Supercenter.66
Two factors may have helped Aldi in its upscale expansion. First, Walmart was not paying attention and
allowed other retailers and grocers, such as Aldi, to attract Walmart customers. Second, by 2005, Costco
Wholesale Corporation (Costco) had made private labels mainstream. In one survey, 85 per cent of US
shoppers said they were open to trying store brands.67 Increasingly, more consumers were willing to overlook
the perceived quality differences between private labels and big brands once they experienced Aldi’s product
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quality. However, Aldi’s upscale expansion may have dictated some changes in its practices, such as accepting
credit cards and broadening its product categories (e.g., low-fat 1 per cent milk).68
As Aldi expanded, the reduced shopping time appealed to more affluent customers, commenting that “I am
a busy mom. I don’t have time to navigate a huge grocery store with kids begging to get out and go home.
I can get in and out of Aldi in no time.”69 Interestingly, time-strapped and lower-income shoppers had also
valued fast shopping when Aldi was first launched.
Aldi understood the grocery market and customer preferences exceptionally well. The typical consumer
had an excellent idea of what they wanted to purchase when they went to a store. Many consumers would
only purchase the number of items stocked at a typical grocer (30,000 items) or Walmart (150,000 items).70
Additionally, more and more shoppers became less brand loyal.71 Price was winning over brand loyalty
with consumers. When it came to price, the perception was reality. A McKinsey study found that customers
perceived the prices at Aldi to be 25 per cent lower than at conventional retailers, even though the difference

was much smaller when the correct benchmark was used.72
Retail experts found that Aldi (and other hard discounters) used three primary strategies to create this
perception. Aldi’s use of private-label brands was category-specific, compared to using a common store
brand for all products—such as Costco’s Kirkland and Walmart’s Great Value brands. Aldi branded all its
cereals as Millville, with packaging that explicitly mimicked that of the well-known brands. For example,
Aldi’s Millville $1.39 cornflakes package mimicked the $3.49 Kellogg Company package, making the price
difference appear much larger than if the comparison were made to the Great Value-branded cornflakes.73
Besides customer perception, single-category private-label brands enabled Aldi to exert greater control over
its products’ quality, cost, and in-store display. Moreover, because conventional grocers offered multiple
price points for the same product category, the total bill for a food basket was larger than at Aldi.74
Aldi was known as a hard discounter, but it was very particular about its quality of food products
offerings. This was similar to Costco, another private-label retailer.75 One of Aldi’s core capabilities was
to identify and nurture relationships with unknown vendors that could deliver the quality that Aldi
insisted on (much like Costco). For example, Aldi started carrying a private-label orange juice brand
called Florida’s Natural when it entered the Cleveland market. Many customers liked this brand and
switched from Tropicana to Florida’s Natural. Other upscale and conventional grocers, such as Heinen’s
Fine Foods and others, noticed the popularity of this private-label branding and enticed Florida’s Natural
to sell through them at an elevated margin that nearly doubled the price to the consumer. As a result,
Florida’s Natural discontinued its arrangement with Aldi.76
There were other similarities between Aldi and Costco. Both retailers displayed items directly on pallets.
Both retailers convinced vendors to repackage their products in containers that maximized pallet space. An
example was the square bottles for cashew nuts used by Aldi and Costco instead of round cans.77 Vendors
also had to put “large UPC [universal product] codes on every packaging surface so that seated cashiers
could just slide stuff over the scanner at lightning speed.”78
The result of all its interlinked activities was that Aldi was extremely profitable. Aldi’s sales grew by an
estimated eight per cent per year from 1998, and it opened 100 stores per year between 2015 and 2019, with
plans to have 2,500 stores by 2022.79 Aldi’s focus on costs yielded extremely high operating and net margins
(9.3 per cent in Germany). Its cash-financed expansion was a testament to the success of its business model.
Aldi paid its staff a higher salary than most other discounters (another similarity with Costco) despite its
focus on costs. For example, in 2015, Aldi cashiers received a minimum hourly salary of $10.50. Around
the same time, Aldi advertised for district managers with college degrees who could earn an annual salary
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of $75,000 (plus a corporate credit card, company car, and fuel for professional and personal use).80 A
typical Aldi store had ten employees trained in all aspects of the business, whether they came in as checkout
clerks or managers. One survey found Aldi to be the third-best grocer in the United States, followed by
Trader Joe’s (which was owned by Aldi North).81
CHANGES IN THE GROCERY INDUSTRY
Amazon’s acquisition of Whole Foods in 2017 sent a warning signal to all grocers. Perhaps more
significantly, Amazon incorporated its online model into the grocery business. There were two basic
variants: the online-only model and the hybrid model.
Online-Only Model
In the online-only model, customers ordered their groceries from a website and usually had them delivered
on the same day. There was either a subscription or delivery cost associated with this service. This started
only in highly urbanized areas but also expanded into suburban areas. A recent study of the online model
concluded that it was ultimately not viable if it planned to compete based on price. It may have been possible
to survive if it was a premium service that customers were willing to pay for.82 None of the major companies
operated an online-only model.

Click-and-Mortar (Hybrid) Model
In the hybrid model, conventional grocers used the online model to complement their brick-and-mortar
stores. Customers could order online and request a curbside pickup.83
ALDI TWEAKS ITS BUSINESS MODEL
As Aldi increasingly appealed to upscale shoppers, it made subtle changes to its product strategy.
Specially Selected Products and Special Products
The Specially Selected private brand was launched in 2013, offering “gourmet foods at everyday low prices.”
The idea was to have an upscale feel with high-quality packaging and higher quality, on average, of 10 per
cent compared to standard products. In contrast, the grocer Jewel-Osco increased prices by an average of 38
per cent for specialty lines. Each Aldi location carried about 75–80 Specially Selected products.84
Also important was Aldi’s own-product innovation (Special Products) of “unexpected products at amazing
prices.” There was speculation that Aldi was moving toward Trader Joe’s popular offering style of
introducing new food products (e.g., Trader Joe’s twist on s’mores was S’mashing S’mores), by introducing
Special Product brands such as Honey Crunch ’n Oats and supporting causes such as Alex’s Lemonade
Stand for Childhood Cancer Research by featuring the foundation’s logo.85
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Aldi Savers and Aldi Finds
Aldi Savers was a new tag for customers looking for the “lowest of the low” prices. Jewel-Osco stores had
found that adding such a symbol could double or even triple sales.86 Aldi used Aldi Savers in 2019 to shift
from everyday low pricing to hybrid everyday low pricing and high–low pricing, likely accelerating the
company’s growth. Observations showed that sales increased significantly when Aldi Savers prices were
discounted by twenty-five per cent.87
Aldi Finds were products were offered for a brief period and promoted through weekly advertisements.88
These products were similar to Costco’s Treasure Hunts and enticed customers to the store every week,
whether or not they had planned to shop for groceries.89 Although Aldi Finds had been a staple at European
stores for years, Aldi introduced the brand to US shoppers only after it had expanded to upscale areas.90
Advertising
Starting in 2018, Aldi made media buys on YouTube and select television markets. This national campaign
was known as “Shop Differentli,” which promoted Aldi’s private-label products, meats, and produce
products as high-quality items. In contrast, earlier advertisements had highlighted the store’s price
difference compared to national brands.91
Aldi and COVID-19
Starting with a 2017 pilot program, Aldi partnered with San Francisco’s Instacart to deliver groceries
bought online.92 Around the same time, Aldi also started a curbside delivery service, where customers
ordered online and had the groceries loaded into their cars at designated parking spots. These initiatives
greatly benefited Aldi in 2020, during the COVID-19 pandemic, extending its community outreach and
promoting its low-price image.
WALMART AND THE HYBRID MODEL
Walmart adopted both an online and a hybrid model.93 As of 2021, Walmart had 3,700 stores that could fulfill
customers’ online grocery orders that could be picked up in-store—up from zero stores five years before.94
Same-Day Delivery
As of 2020, Walmart offered same-day grocery delivery from 3,000 stores, nearly double the number from
previous years.95 The new Walmart+ membership service provided free delivery for orders over $35.96 For
non-members, Walmart typically charged $7.95 or $9.95 for delivery, depending on the time of day.97
Curbside Pickup (Click and Collect)
Walmart’s main emphasis was on “click and collect” because it was much more efficient to have customers
come to Walmart stores than to deliver a grocery order to their homes. Also, when customers went to a
store, they were more likely to make other purchases.98
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The company also invested in more efficient fulfillment and announced plans to build “dozens of automated
micro-fulfillment centres in stores nationwide.” Walmart made investments by hiring in-store pickers to
fulfill online orders and more than 2,000 information technology employees to figure out how to help
Walmart speed up the fulfillment of online grocery orders (see Exhibit 3 for a comparison of Walmart and
Aldi curbside pickup services).99
LOOKING FORWARD
Aldi
According to Aldi CEO, Jason Hart, “We’re always evolving our brand, stores, and product selection to
appeal to more customers. As you know, a few years ago, we announced a 40 per cent increase in our fresh
food selection, focusing on new produce, meat, organic options, and easy-to-prepare foods.”100
Hart explained that Aldi offered online grocery services at nearly all stores. He also noted that Aldi had

extended curbside pickup to 600 stores and was on track to reach 700 locations with curbside pickup by the
end of 2020. In addition, grocery delivery was already available in more than 10,000 US postal codes.101
Aldi needed to catch up on its store expansion goals, having reached the 2,000-store mark in July 2020. It
reset the goal, aiming for 2,500 stores by the end of 2022. It was unclear if Aldi was going to achieve this
goal, as Hart noted:
The Aldi business has evolved since we set forth our first growth milestone in 2017, and
so have our goals. We’re growing by more than just store count—we’re expanding into
new areas of the country, broadening our product range, and scaling our Curbside Grocery
Pickup operations, to name a few examples. While we’re growing on all these levels and
the specific number of stores we’re targeting may shift, Aldi is pleased to still be on pace
to become the third-largest US grocery retailer by store count by 2022.102
Aldi had also opened many stores in western US states and was committed to making 100 per cent of its
private-label plastic packaging reusable, recyclable, or compostable by 2025.103
Walmart
In contrast to Aldi, Walmart halted all its store expansions. It focused on developing a suite of capabilities
to help it become the first-choice retailer for the omnichannel customer. However, in 2020, Walmart was
diversifying profit sources rather than business sources by leveraging and tweaking its existing capabilities.
For example, Walmart expected to be in the top ten advertising platforms by 2025, something that Amazon
had already achieved.104
For the immediate future, Walmart planned to increase its capital expenditure budget by 36 per cent to
roughly $14 billion (around 2.5 to 3 per cent of sales), compared with $10 to $11 billion.105 Most of the
expenditure would be focused on customer-facing activities such as fulfillment and delivery. Walmart was
aggressively automating picking processes based on the concept of market-fulfillment centres, capable of
storing and picking refrigerated and ambient-temperature items, as Furner explained:
Market fulfillment centers make the [picking] process significantly faster and more profitable.
They move a significant amount of the picking off the sales floor, allowing us to do more within
the box. We’re now moving to scale these locations, and we expect to have over 100 of these
within the next couple of years. And in some stores, we’ll carve out existing space for them;
and at others, we’ll add on; and in some cases, we’ll build stand-alone units.106
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In addition to market-fulfillment centres, Walmart also planned to invest in conventional DCs and e-
commerce fulfillment centres.107
The Walmart-integrated grocery and general merchandise mobile application saw a record number of
downloads early in 2020.108 Fifty-six per cent of the more than 2,500 shoppers surveyed last summer by e-
grocer Good Eggs reported using Walmart to order their groceries online—the most of any grocer. 109
WALMART AND ALDI: COLLISION OR COEXISTENCE?
It seemed inevitable that both companies had to make significant investments to court hybrid customers
and make things as simple as possible for online grocery shoppers.110 Aldi encroached on Walmart’s
territory by upgrading its product offerings and locating its stores near Walmart Supercenters. Walmart, for
its part, tried to counter Aldi with its small-format Neighborhood Market stores. However, while Aldi was
not slowing down its store expansions, Walmart seemed to be hitting the brakes.
Walmart would have to decide whether to cut back on its Neighborhood Market stores and solely focus on
the Supercenters. Was Aldi risking going beyond its comfort levels to move up the grocery industry ladder?
Or were both competitors justified in courting their own customer segment? Both companies had to make
some critical decisions in the grocery market post-COVID-19.
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EXHIBIT 1: WALMART SUPPLY CHAIN
Logistics
P&G
Newell
Energizer
Vendors
Distribution Center
1 2 3 4
Walmart Walmart
Walmart Walmart Walmart Walmart
Walmart
Note: P&G = Procter & Gamble.
Source: Created by the case author based on case information.

500
0
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Page 11
2011
2012
2013
Supercenter
2014
2015
2021, https://progressivegrocer.com/walmart-disrupting-grocery-again.
2016
Neighborhood Market
2017
EXHIBIT 2. WALMART STORE EXPANSIONS
2018
2019
2020
Source: Created by the case author based on Mike Troy, “Walmart Disrupting Grocery Again,” Progressive Grocer, March 16,
W25572

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EXHIBIT 3: COMPARING GROCERY PICKUP: WALMART VS. ALDI
Pros and Cons of Grocery Pickup at Walmart
Pros:
• If an item was unavailable, Walmart would often replace it with a better item (or a larger quantity) for
the same price.
• Walmart grocery pickup also had fun random perks, like a holiday bag at Christmas filled with coupons
and samples.
Cons:
• Online prices are not always the same as in-store ones.

• There was no direct communication with the shopper, so it was not possible to approve or decline
replacements ahead of time, add items after the cut-off time, etc.
• The wait time to pick up groceries was longer than at Aldi.
• It was easier to overspend at Walmart.
Pros and Cons of Grocery Pickup at Aldi

Pros:
• The Instacart app for Aldi’s curbside pickup, which enabled real-time direct communication with the
shoppers. Shoppers could also ask for approval of any replacement items and would often check if
there was anything else to be added at the last minute, making the whole process easier.
• The shopper was almost always ready with groceries the minute customers pulled up.
Cons:
• If an ordered item was unavailable, shopper would ask if a replacement would be acceptable but did
not give the original cheaper price if the replacement was pricier.
• Aldi had higher prices for online orders, and the weekly deals were not always available.
• There was a $1.99 fee for Aldi’s curbside pickup.
Source: “Grocery Pickup at ALDI vs. Walmart—Which Is Better?,” Tex-Mex Mom, July 27, 2020,
https://www.thetexmexmom.com/grocery-pickup-at-aldi-vs-walmart-which-is-better/.
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ENDNOTES
1
This case has been written on the basis of published sources only. Consequently, the interpretation and perspectives
presented in this case are not necessarily those of Aldi, Walmart, or any of their employees.
2
Mary Ellen Biery, “These Industries Generate the Lowest Profit Margins,” Forbes, September 24, 2017,
https://www.forbes.com/sites/sageworks/2017/09/24/these-industries-generate-the-lowest-profit-margins/?sh=2f081ae8f49d.
3
Becky Yerak, “Winn-Dixie and Bi-Lo Owner Files for Bankruptcy,” Wall Street Journal, March 27, 2018, https://www.wsj.com/
articles/winn-dixie-and-bi-lo-owner-files-for-bankruptcy-1522169112.
4
“IRI: Consumers Choosing Drugstores over Food and Mass,” RetailWire, August 20, 2007, https://retailwire.com/
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W25572

ALDI AND WALMART: ON A COLLISION COURSE?1

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How Walmart Dominated the Grocery Store Industry

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Vendor-Managed Inventory: Walmart’s Competitive Advantage

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How Walmart Lost Its Way

The Rise of Aldi in the United States

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CHANGES IN THE GROCERY INDUSTRY

operated an online-only model.

Click-and-Mortar (Hybrid) Model

ALDI TWEAKS ITS BUSINESS MODEL

Specially Selected Products and Special Products

Aldi Savers and Aldi Finds

Aldi and COVID-19

WALMART AND THE HYBRID MODEL

Curbside Pickup (Click and Collect)

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WALMART AND ALDI: COLLISION OR COEXISTENCE?

EXHIBIT 1: WALMART SUPPLY CHAIN

Walmart Walmart Walmart Walmart

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EXHIBIT 3: COMPARING GROCERY PICKUP: WALMART VS. ALDI

Pros and Cons of Grocery Pickup at Walmart

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Pros and Cons of Grocery Pickup at Aldi

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