Form follows Function

Hard discounter Aldi has carved out a niche in the hyper-competitive grocery space as an "exclusive brand" retailer of a relatively limited assortment of grocery products in a spartan, but highly efficient store environment.

The retailer traces its roots to the early 1900s in Essen, Germany, and first opened its doors in the U.S. in 1976. Today, Aldi is a multi-billion dollar business boasting 1,200 locations in 32 states.

Most stores are between 8,000 and 15,000 square feet and stock about 1,400 products, more than 90 percent of which are the retailer's own brands. Stores are bright and modern, and merchandisers make the most of the space by displaying product on pallets as well as shelves.

"It's the great quality of our products that keep customers coming back," Aldi president Jason Hart said in a news release. "We're committed to bringing consumers the highest quality products at the lowest possible prices."

Nothing quite exemplifies Aldi's commitment to offering quality food in a no-frills environment than the retailer's shopping cart "rental" policy. Shoppers drop a quarter into an automated cart dispenser and a cart is released. At the end of the visit, once the cart has been returned properly, the shopper's quarter is returned. The retailer saves labor on collecting and returning carts and reportedly passes the savings on to shoppers.

Aldi has grown its U.S. presence organically, without mergers or acquisitions, adding an average of 80 stores per year. The retailer's current U.S. territory extends from the East Coast to the Midwest.

But, a June 2013 store opening in southern California and $55 million investment in a nearly 1 million-square-foot distribution center in Moreno Valley, Calif., hint at plans for a significant West Coast presence in the future.