2011 Power 50: No. 7 Charles Youngstrom

More than 500 people showed up within the first 30 minutes of the grand opening of Aldi's first New York City store in Rego Park, Queens.

“The Queens opening received an overwhelming welcome from the community,” Aldi Co-President Charles Youngstrom told SN.

The discount grocer hopes for a similar reaction to additional stores slated to open soon in the New York City area, including one in the Bronx and another in Bay Shore, a suburb on Long Island. Later this year, Aldi will open its first Washington, D.C., location.

Years ago, Aldi averaged about 20 store openings a year. Today, as the 1,100-store retailer aggressively expands its footprint, the number has swelled to 80 a year.

The company's challenge is proving to shoppers who have never visited Aldi that high-quality products don't have to come at high prices, said Youngstrom.

One way it accomplishes this is with initiatives like its new Switch & Save program, which encourages consumers to switch from national brands to Aldi private labels.

Likewise, all of its exclusive brands are “double guaranteed,” which means that if for any reason a customer is not 100% satisfied with a product, Aldi will not only replace the product, but also refund the customer's money.

Every move that Aldi makes is designed with one goal: To help its customers stretch their grocery dollars, said Youngstrom.

The strategy appears to be working. Consumers view the discount grocer as the low-price grocery leader, ahead of Wal-Mart, Costco, Kroger and other retailers, according to a new study by Market Force Information, Boulder, Colo., a customer intelligence solutions company.

“We consistently provide the highest-quality products at the lowest prices possible every single day,” Youngstrom said.

By high quality, Youngstrom refers to private labels like its Grandessa Signature premium-product line, Lacura luxury skin care line and Fit & Active better-for-you line. Almost 95% of its products are sold under its private labels.

“We consistently review our existing Aldi exclusive brands in every category to ensure we are providing the best products and highest value to our customers,” he said.

Aldi carries about 1,400 of what it calls the most frequently purchased items. All products must undergo in-house quality testing at its company headquarters in Batavia, Ill., along with independent laboratory analysis.

One way it keeps prices low is by using a cart-deposit system, through which shoppers insert a quarter to release a cart and receive the quarter back upon the cart's return. This eliminates the need for employees to spend time gathering and returning carts.

Other cost-saving practices include a smaller store footprint and encouraging customers to bring their own shopping bags.