If the thought of extreme couponing drives you crazy but grocery prices wipe out your budget, maybe it's time to try a different type of store. A three-way comparison by Cheapism.com examined retailers with three different models for selling groceries: Kroger, a traditional grocery store and umbrella brand for chains across the U.S.; Walmart, a big-box multinational that tallies more than half its sales from groceries; and Aldi, a German-owned discount grocery chain with a foothold in 32 U.S. states. We found that Aldi, with its bare-bones approach and emphasis on store brands, is easily the cheapest grocery store overall.
Cheapism visited one location for each store in the Columbus, Ohio, area and priced 37 products from a variety of departments. We chose identical items (brand and size) whenever possible and like items otherwise. Aldi does not carry well-known brands but stocks in-house labels, so we checked out a selection of store brands at Kroger and Walmart, as well. Where sizes differed, we determined a unit price and then figured a per-item price for the same quantity at all three stores.
The model seems to be working, however, and Aldi claims many fans, including Private Label Store Brands magazine, which recently named the chain Retailer of the Year for 2014. Shoppers we interviewed said the store brands are comparable in taste and quality to brands carried by the big-name grocery retailers, and the shopping experience is very customer-friendly.
Still, Aldi displays a few flaws. The lean selection is too spare for some consumers -- no deli, for example, nearly all in-house brands, and often just one size of a product -- and the quality of produce and canned and package goods disappoints others. At present, the chain operates about 1,300 locations.
Consumers offer a mixed appraisal of the Walmart store brand Great Value. A Cheapism Facebook poll revealed that many frugal shoppers consider the brand satisfactory, and Walmart was the clear leader when respondents ranked the three retailers on quality and overall value. But reviews posted elsewhere online are less complimentary about the in-house label, and some note that produce often looks wilted and generally unappetizing.
Selection at Kroger is slightly better than what Cheapism found at Walmart and definitely superior to Aldi. For example, Kroger was the only chain that maintained fresh meat and seafood counters. In-house brands, including the Kroger Value label (the retailer's low-price brand), garner accolades from frugal shoppers and experts. Trade publication Private Label Store Brands named Kroger its 2013 Retailer of the Year. Consumers we spoke to also commend the shopping experience, a factor that earned Kroger more points than Walmart and Aldi in this grocery store face-off.
Bottom Line.Shoppers who choose a grocery store on price alone will head to Aldi, which boasts decent store brands and a unique format that makes for cheap, no-nonsense shopping. Walmart stands out for certain price advantages and inventory that extends far beyond groceries, while Kroger's strong suit is the overall shopping experience and generous loyalty program.
Related: 25 Best Finds at Walmart