Save Big: Limited-Assortment Grocery Stores Offer Fewer Choices, Bigger Savings
Stores offer less variety, but you can save more on your shopping bill.
Feb. 1, 2011 — -- The typical supermarket contains 50,000 different products. Would you give up some of that selection for lower prices?
Millions of Americans are doing just that, at "limited assortment grocery stores."
The best-known are Save-A-Lot, Aldi and Grocery Outlet.
You probably won't find olive tapenade, brie cheese or basmati rice at one of these smaller stores, but you can find big savings.
Here's an overview of the concept. Start with a space about half the size of a typical suburban supermarket. Stock it with 95 percent store brands. And only carry about 80 percent of the selection traditional stores do.
"Good Morning America" traveled to the Save-A-Lot in Hyattsville, Md., to check it out.
Fewer Selections, Deep Discounts
There wasn't as much produce on display, but it was good-looking and affordable. There were bananas for just 45 cents per pound, compared to 80 cents at a traditional chain nearby.
Save-A-Lot only carries name-brand products when it can score a deep discount on them and pass the savings along to its customers as a special deal.
Mostly you see shelves lined with unfamiliar store brands like Kurtz, Coburn and Portman's.
"Everything is great, it's fresh and I've never had a problem. Never had to bring anything back. This is the place to shop," one female shopper said.
Other signs of a unique philosophy: a smaller meat department with fewer cuts. And products displayed on the palettes they came in.
This store offered yellow mustard and ketchup -- but in one type, one size. One type, one size, so they're not using a lot of shelf space to stock dozens of brands.
Savings for Customers, Success for Stores
Save-A-Lot claims to save its customers as much as 40 percent with this formula, and retail analysts back up that number.
"They come in every day because we do save them so much money. They're able to give their families more on the table for less money out of their pocket," said Shannon King of Save-A-Lot. "To be able to save a family money in this economy is a great thing for us."
The concept is working for the stores, too. While traditional grocery sales are stagnant, revenue at limited assortment grocers Save-A-Lot, Aldi and Grocery Outlet is growing. In fact, all three chains plan to expand dramatically in the next couple of years.
Some limited assortment stores push prices even lower by not accepting credit cards -- and the fees they have to pay for the privilege. The Save-A-Lot "GMA" visited charges a few cents for plastic bags, and asks customers to fill those bags themselves, all to cut costs.
Comparing Prices
Now, let's compare prices of the leading name brands with the Save-A-Lot store brands.
Tortilla chips: Name brand $2.99, Save-A-Lot 99 cents
Juice boxes: Name brand $2.80, Save-A-Lot $1.79
Canned veggies: Name brand $1.70, Save-A-Lot 49 cents
Save-A-Lot store brand prices vs. store brands at traditional places
Mac-n-cheese: Traditional store: 99 cents, Save-A-Lot 33 cents
Coffee beans: Traditional store: $8.90, Save-A-Lot $4.99
Soda: Traditional store: $1.09, Save-A-Lot 69 cents
Limited assortment stores typically offer their own store brands at low prices all the time and only have sales on name brand products that come and go.
Cost-Saving Measures
Some stores may require you to pay to use a shopping cart.
Aldi stores require you to deposit a quarter, to get a cart from the rack, but you get your quarter back if you return it to the rack afterward.
It's all to save on the labor cost of having employees collect carts.