Why: Checkout price $13.58 less than Walmart and $21.43 less than Kroger
Can frugal consumers get cheap groceries without going extreme-couponing crazy? Sure, as long as you know where to shop. We recently compared grocery prices at three different types of stores: Walmart, the reigning king of low prices; Aldi, a growing chain of discount groceries; and Kroger, a supermarket chain with siblings (including Ralphs, Food 4 Less, and Fred Meyer) spread over 34 states. A survey of 37 standard grocery items earned Aldi the low-price winner's laurel, with savings of more than 15 percent over Walmart and about 23 percent over Kroger (about 17 percent including Kroger sale prices at the time of comparison). However, in other respects, such as variety and convenience, the best grocery store isn't necessarily the cheapest.
In our price comparison, the shopping cart tallies from late-February trips to one location of each chain in the Columbus, Ohio, area hit $72.30 at Aldi, $85.88 at Walmart, and $93.73 at Kroger. When accounting for savings available with the Kroger Plus Card, however, the supermarket's basket total dropped to $86.78, within one dollar of Walmart. By way of background, a Gallup poll from July 2012 found that half of American families spend more than $125 a week, on average, for groceries.
Comparative pricing on national (and regional) brand names showed that Walmart again beat Kroger with prices that were significantly cheaper overall. Aldi fell out of the running here because this cheap grocery store doesn't carry traditional brands.
Other aspects of the grocery shopping experience also claimed our attention. We noted the number of open checkout lanes after 5 p.m. on the (week)days we shopped, customer service, product selection, and treatment of coupons. We also researched the quality of the store brands by reading online reviews, talking to more than a dozen shoppers, and culling comments from our own Facebook poll.
To make the shopping cart comparison fair, we relied on high school math. For like items of unequal quantity, we calculated a per-unit price and then used that result to determine the total cost for the most commonly sold quantity. For example, russet potatoes were available at both Aldi and Walmart in 10-pound bags but Kroger was selling 8-pound bags, so we projected the cost of a 10-pound bag at Kroger.
A final tally of all the adjusted prices produced the cheapest grocery store: Aldi, where the bottom line came to $72.30. The Facebook poll we conducted, which garnered about 20 responses, revealed that respondents shop at Walmart twice as often as at Kroger and three times more often than at Aldi. Moreover, some frugal shoppers hold to the (mis)perception that Walmart is cheaper than both Aldi and Kroger. Our price comparison test should put that myth to rest.
Take Aldi, for example. "It seems strange to buy things with brand names like Happy Farms and Millville," said Dan Hills, a steadfast Aldi shopper and father of three, "but I have found very few items that we think are not as good as major store brands." For the rare item that proves unsatisfactory, Hills said he takes advantage of Aldi's Double Guarantee, which lets him return it for a full refund and get a replacement. "Produce is always fresh," he added. "It's quality stuff, no doubt." Indeed, Private Label Store Brands magazine recently named Aldi 2014 Retailer of the Year for delivering value and high-quality products to consumers. (Not everyone agrees with Hills about the produce. A review on Pissed Consumer claims that Aldi's fruits and vegetables spoil faster than what's sold elsewhere.)
Store brands carried by Kroger also win over consumers. Christina Taylor, a vegetarian and devoted Kroger shopper, is a fan of Kroger's in-house brands and buys them largely to save money but is totally satisfied with their quality. Several other shoppers we interviewed likewise praised Kroger brands, especially dairy products and frozen foods, as well as the produce. Tracy Wagner, a new mom who is also keen on Kroger, said she appreciates the organic and natural selections and viewed the new Simple Truth and Simple Truth Organics lines as strong additions to the Kroger brand. Kroger house brands likewise impressed the experts at Private Label Store Brands, which declared Kroger the 2013 Retailer of the Year. The trade publication's experts noted that Kroger store brands were constantly evolving in response to customer needs.
For any number of reasons, Walmart is often the target of complaints. We've reported on Walmart several times and encountered similar consumer comments regardless which products or what aspect of the giant retailer's operations we looked at. For example, Emily Jones, a homemaker with three children, said she shops at Walmart when she needs to save money and doesn't want to bother with coupons. But that doesn't make her a satisfied customer. "I think that you get what you pay for," she said in reference to product quality, as well as customer service. The produce, in particular, is often found wanting, according to some consumers we interviewed. On the other hand, one Facebook poll respondent said Walmart's Great Value store brand is truly a great value, although sometimes out of stock. Others like Walmart enough to rank it higher for quality products and overall value than Kroger and Aldi. (Kroger finished second in our poll and Aldi came in last on both counts.)
Loyal Kroger shoppers can also earn Fuel Rewards. For every $1 spent on grocery shopping, customers get one fuel point; 100 fuel points are worth 10 cents off each gallon of gas at Kroger fuel stations and select Shell stations; 200 fuel points earn you 20 cents off each gallon of gas; 1,000 fuel points are good for a $1-per-gallon discount on one fuel purchase up to 35 gallons. In addition to savings with the Kroger Plus Card and Fuel Rewards, shoppers can redeem manufacturers' coupons.
Extra savings opportunities are far less generous at Walmart -- there is no preferred shopping card, for example -- but the discount chain runs occasional sales and honors manufacturers' coupons. Walmart also supports a straightforward price-matching policy. If you see an identical item in a competitor's ad for less than the Walmart price, the retailer will match that price at the register (of course, certain conditions and exclusions apply).
Aldi offers weekly "special buys" on select products. The week we shopped, for example, the store brand orange juice was not yet on sale, but an online search revealed that it was slated for a 20-cent price cut the following week. Unlike the two other grocery stores we checked for cheap prices, Aldi does not accept coupons but its low-price business model is clearly evident in its no-frills approach. For example, to get a cart shoppers must insert a quarter, which is refunded when returned. Shoppers bag their own groceries with their own bags or buy them at checkout. Other cost-efficient oddities include accepting only cash or debit cards and maintaining comparatively limited store hours.
Walmart stocks an exponentially wider inventory -- some Walmart Supercenters carry what seems like everything under the sun -- but the grocery department still lags Kroger. Where Kroger offers full deli, meat, and seafood counters, the Walmart locations we have visited offer only a deli. There is no freshly cut meat, although plenty of prepackaged options, but the selection of prepackaged seafood is smaller.
Walmart and Kroger run neck-and-neck on dairy and non-perishable items, and both offer considerably more in the way of produce and organic produce than Aldi does. In fact, the most recent industry survey by the Organic Trade Association found that Walmart was the largest organic retailer in North America in 2011 and Kroger ranked third. Based on our grocery shopping expeditions, we concluded that our local Kroger and Walmart stores offered roughly the same amount of organic fruits and vegetables, although it was hard to know for sure. Walmart intersperses organic items with the regular produce whereas Kroger maintains several designated sections.
While we didn't have the same interaction with employees at Aldi, the shopper we interviewed offered kind words on their behalf. He said they work very hard; by comparison, he added, employees at other grocery stores seem to move in slow motion.
Our prior reports on Walmart, which compared prices, quality, and shopping experience for non-grocery items, found that many consumers perceive Walmart as dirty, loud, crowded, and weak on customer service. We encountered similar views this time. Wagner, a Kroger partisan, groused about "checkout lines that are always way long" because so few registers are open. Grocery store reviews at Consumer Affairs batter Walmart more forcefully than Kroger, with complaints about poor-quality products, bad customer service, rude employees, and so on. Reviews at Pissed Consumer grumble about customer service at all three cheap grocery stores, although Walmart fares the worst.
Overall, our grocery shopping experience was good in all three stores.
Why: Checkout price $13.58 less than Walmart and $21.43 less than Kroger
Why: More than 20 percent savings compared with brand names at Kroger
More than 20 percent on average less than Kroger
Only 6 products (7 including sale items) were cheaper at Kroger compared with Walmart
Why: Impressive savings with Kroger Plus Card (reduces prices to near-Walmart level), including Fuel Rewards program
Runs sales, accepts coupons, offers Kroger Plus Card loyalty program that includes savings on groceries and fuel
No loyalty card, accepts coupons, runs few sales
Why: Named Retailer of the Year in 2013 and garners very positive consumer feedback
Well-regarded store brands, especially the Simple Truth line; named 2013 Retailer of the Year by Private Label Store Brands experts; a few complaints about poor quality meat
Some gripes about poor quality produce and other products; many non-specific "you get what you pay for" comments
Why: Well-stocked fresh meat, seafood, and deli counters; large selection of organic and natural items
Excellent selection with full deli, meat, and seafood counters and ample selection of prepackaged items; wide assortment of organic and natural products
Decent selection but no fresh meat and seafood counters; good deli and organic produce offerings
Why: Helpful employees; few complaints about customer service; most open checkout lanes during busy time of day
Very pleasant shopping experience; comparatively rapid checkout
Target of complaints about poor service, crowded stores, long lines at checkout
Mixed feedback on customer service