ALDI SEEKS LICENSES TO SELL BEER, WINE

Stephanie Fagnani

BATAVIA, Ill. -- Octoberfest could come a little early this year for domestic Aldi shoppers, as the Germany-based limited assortment retailer -- with U.S. headquarters here -- seeks liquor licenses to sell beer and wine across the country.

According to David Kilbane, administrator for the village of Round Lake Beach in Lake County, Ill., representatives from the retailer requested beer and wine licenses during a recent village board meeting, telling board members Aldi was hoping to parlay its international success with alcohol sales in the States.

"We were told by the corporate office that they sell beer and wine in their stores in Germany -- mostly beer -- and it's successful there and they want to try it in the States. It's not just us; they've applied all over the place. They are going to take something that's working in Europe and try to apply it here," Kilbane told SN.

While granting the license falls in the hands of the county's liquor commissioner, the only question up for review involves the placement of the liquor as it relates to the rest of the store's merchandise. "He's waiting to hear back from Aldi now what type of separation they are putting in," Kilbane said, noting that these types of permits take a maximum of two months to obtain.

The move comes on the heels of the highly publicized success that specialty retailer Trader Joe's had on the West Coast with sales of its inexpensive Charles Shaw wines, referred to by industry sources as "Two Buck Chuck" due to its retail price of $1.99. Aldi bought Trader Joe's in the late 1970s.

"I think we're seeing an example of learning being shared between Trader Joe's and Aldi," said Jon Hauptman, vice president, Willard Bishop Consulting, Barrington, Ill. "[Aldi's] decision to sell beer and wine makes sense in today's increasingly competitive environment -- they're looking to grow by expanding their category base."

Historically catering to lower- and middle-income consumers, Aldi has expanded its offerings in recent years and now attracts a wider demographic of shoppers, Hauptman said. "As Aldi expands, they are now attracting middle income and even upper-middle-income consumers who find Aldi an acceptable shopping alternative to traditional supermarkets. Consequently, I think beer and wine could do very well at Aldi stores, particularly if the beer and wine prices are perceived as a strong value."

Aldi operates more than 6,000 stores worldwide, with more than 600 stores in the United States. Most of the items it carries are private label, and all are sold at deeply discounted prices.

In fact, research conducted by Willard Bishop Consulting shows the strongest values at Aldi are priced at approximately 30% less than the strongest values available at mainstream supermarkets. While variety is limited and brands are often unfamiliar to shoppers, options across grocery categories keep the retailer popular.

"Aldi is effectively attracting consumers with these savings,"Hauptman said.