BUSINESS

Aldi opens in the Southland: What you need to know

Aldi, a German discount grocer, opened its first eight stores in Southern California this week. By the end of the year, it plans to have 45 stores in the region.

So what is Aldi? Aldi is a supermarket chain based in Germany with about 10,000 stores in 18 countries. In the U.S., the chain operates about 1,500 stores. 

Who founded the chain? Two brothers, Karl and Theo Albrecht, founded Aldi in 1946 after taking over the family grocery store. The Albrechts also control Trader Joe's, based in Monrovia. 

Bro brawl: In 1960, the brothers had a falling out over selling cigarettes and split their empire in two. In the U.S., it is Aldi Sud which operates as Aldi, while Aldi Nord runs Trader Joe's. 

Aldi and Trader Joe's have some similarities -- both have smaller footprints compared to traditional supermarkets, and carry largely store-brand products. 

The tradeoff: Aldi is known for quality products at deep discounts, with many items priced 20% to 50% below rivals. However, those savings come at a price.

Shoppers have to bag their own groceries. They must also pony up a quarter deposit to use a shopping cart; the deposit is given back when the cart is returned (this cuts down on theft, and also reduces the amount of workers needed to clear parking lots). 

Best-selling products are often put out directly on shipping pallets, instead of stacked on shelves. 

Rivals: For now, its competitors are primarily dollar stores, Wal-Mart and nearby supermarkets. Long-term, Aldi could have far-reaching effects on the Southland grocery market if it keeps expanding. 

Challenges: Aldi is facing a fiercely competitive region where people already have their favorite grocery stores. Southland chains such as Gelson's and Bristol Farms have loyal fans; many locals also frequent the dozens of farmer's markets that dot the region. 

This is the place that ultimately spelled the end of Haggen and Fresh & Easy. Both supermarket chains closed stores last year after underestimating how difficult it would be to win over Southland shoppers. 

Where are the first eight Southland stores: Palm Springs, San Bernardino, Yucaipa, Lake Elsinore, La Quinta, Fontana, Beaumont and Moreno Valley.

First take from shoppers: On Thursday, some customers at the Aldi store in Moreno Valley were thrilled by the low prices, while others grumbled about having to bag their own groceries or the lack of name-brand products.

Jessica Herrera, 28, said she was pleased by the variety of gluten-free snacks at good prices. Aldi might become her go-to spot for picking up a quick meal or last-minute ingredients, she said. 

"It's very affordable," the Moreno Valley resident said. "It's a place for convenience."

Gnett Johnson, a homemaker from Beaumont, said the low prices were impressive. But she said Aldi couldn't replace a big supermarket like Vons or Ralphs.

"You still have to go to Vons to get brands like Kraft," she said. "It doesn't have a deli section where you get your meats cut."

Follow Shan Li on Twitter @ByShanLi.

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