Limited-Assortment Stores Expanding

More supermarkets are offering compact versions to cater to thrifty shoppers.

January 26, 2011

BATIVIA, IL - Smaller, limited-assortment grocery stores are popping up around the country as shoppers seek out bargains, USA Today reports. Traditional supermarkets are opening these compact versions that have fewer products but more savings.

For example, Aldi, Grocery Outlet and Save-A-Lot are "very aggressively expanding," according to Jim Hertel, managing partner at Willard Bishop.

"As prices continued to increase, people started shopping for food in more-varied locations," said Phil Lempert, the analyst who writes SupermarketGuru.com. "Certainly, all three are going to grow substantially in the next few years."

There are more than 1,135 Aldi stores with plans to open 80 to 100 more in 2011. Save-A-Lot has more than 1,200 locations and will expand to twice that number by 2016. Grocery Outlet boasts 150 stores with 15 more in the works for this year.

The two largest limited-assortment chains ?" Save-A-Lot and Aldi ?" stock around 80 percent of the products found in regular grocery stores. The items are generally private-label packaged foods with a few national brands, and the produce and meat selections are smaller.

By focusing on private-label items, prices are "about 40 percent less than you will find in a traditional supermarket," said Hertel.

With the recession, shoppers have jettisoned any shame connected to shopping at discount grocery stores, said Hertel. "Watch the parking lots. ?? You??ll see a lot of late-model cars, even what we would categorize as luxury marques," he said.

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