Cheapest Grocery Store: Walmart, Kroger, or Aldi?
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- By Raechel Conover
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.
The cheapest grocery store in our shopping cart comparison, Aldi has adopted a low-price strategy that includes bagging groceries with your own bags, limited selection, and limited store hours. While complaints surface about in-house brand quality, a trade publication named Aldi Retailer of the Year for 2014. We found the store well-organized and less intimidating than big-box stores.
Walmart ranked second in our shopping cart price comparison. The Ad Match Guarantee is an effective low-price strategy and our shopping expedition proceeded without hiccups. Selection was on par with other cheap grocery stores.
Don't count Kroger out of the running despite a third-place price finish. If you adhere to the "you get what you pay for" philosophy, Kroger may be worth the extra pennies. High-quality store brands garner positive feedback from both consumers and experts, and a Kroger Plus Card nets discounted prices. Kroger also rewards loyalty with savings at the gas pump.
Which Is the Cheapest Grocery Store: Walmart, Kroger, or Aldi?
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.
Grocery Store Prices.To find the cheapest groceries, we checked prices on the same items but not necessarily the same brands. We filled our shopping cart with several products from each department: milk and cheese from the dairy case; meats from the meat counter; enough produce to make a decent salad; several organic offerings such as baby carrots; condiments such as ketchup, ranch dressing, and peanut butter; frozen foods such as pizza and family-size lasagna; bread and buns from the baked goods aisle; and staples such as pasta, flour, soda, juice, cereal, and a few snacks.
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.
Name-Brand Prices: Walmart vs. Kroger.Aldi carries few, if any, national or regional brands, but Walmart and Kroger carry many of the same brand-name products, such as Jif peanut butter, Uncle Ben's rice, and Dannon yogurt. When we compared prices on 26 of those items at both stores, only six were cheaper at Kroger than at Walmart; seven when the Kroger Plus Card sale price was included. Among the items that were cheaper at Walmart, the savings averaged more than 20 percent.
Store Brand Quality.You are what you eat (as the saying goes) and many consumers are partial to particular brands. Our research found that shoppers loyal to a given cheap grocery store also tend to approve of the quality of its in-house brands.
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.)
Comparing the Grocery Shopping Experience
Coupons, Sales, Loyalty Cards, and Rewards.Stores try to make grocery shopping more enticing through coupons, weekly specials, savings cards, and, at some chains, discounts on fuel for the car. Kroger excels at all of the above. The Kroger Plus Card is a must-have even if you're an occasional visitor -- that's how we accrued savings of $6.95 on our virtual shopping cart. This loyalty card offers customers scores of discounts every week, and an associated mobile app lets you download coupons onto the card, which together makes for a pretty sophisticated setup compared with other cheap grocery chains.
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.
Product Selection.Selection matters to some frugal shoppers, and for others a limited assortment is good enough. Loyal Aldi shoppers concede that the cheapest grocery store is a bit lacking in variety but insist that management pays attention to what people want. "There's no doubt that you cannot get everything at Aldi that you can at another grocery store," Hills said. "Not even close. But I have noticed that when something becomes popular, they carry it, and then carry more and more of it." Good examples include Greek yogurt and K-cups. Still, Aldi has no deli and a very narrow array of meats and seafood; other products often are available in only one brand and one size. These factors deter Christine Wickline, a mother of three, from shopping at Aldi. "I don't feel like Aldi is worth a trip because they don't have enough of the things we buy," she said. "And I need one-stop shopping."
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.
Customer Service.Kroger holds the edge here with employees who went out of their way to accommodate this reporter's two young children, who had come along for the ride. One worker who was stocking the dairy department stopped and talked to the boys, then opened a box of Go-Gurt and handed each a snack (plus a stack of napkins). But Kroger critics exist. Reviews posted at Consumer Affairs, for example, critique the grocer for poor-quality meats, checkout prices that don't match shelf prices, and other assorted irritants.
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.