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USA: The unbroken hype about the trendy discounter Trader Joe's

Discount Retail Chain Aldi Nord's US sister company Trader Joe's has become a cult brand in the USA. For the entrepreneurial family in Germany, success is particularly important. Because business in Europe is weakening.


In Harlem, in northern Manhattan, Trader Joe's advertises cheap purchases. On the escalator in the entrance area, the discounter has painted the lettering "Prices" in bright colors on the wall, and in the store itself, the retailer has stylized dollar signs everywhere. The promise: prices are low here.


However, one item from Trader Joe's is now traded for 50 dollars and more: the company's beige cloth bag, which fans of the supermarket are currently pounce on like a rare fashion accessory. In the stores themselves, the often sold-out bag costs only 2.99 dollars, but owners sometimes call up significantly more on the Internet.


The hype is so great that even university professors are dealing with it. The bag signals to others that you are part of the club, says Michael Roberto, management professor at Bryant University in Smithfield. "They have built up a cult-like following."


The cloth bag is an expression of a rapid rise in the US food market. With Trader Joe's, the US sister of the German discounter Aldi Nord has built up a cult status in the United States in recent years. It is above all the low-cost private labels that attract the otherwise brand-loving Americans to the stores, more so than before in times of high inflation.


Success is particularly important for Aldi

For the owner family of Aldi founder's son Theo Albrecht junior, the success of the US retailer is particularly important at the moment. Because the core business is weakening. The new Aldi boss, Nicolás de Lope, is now expected to lead the European business to similar successes as its US counterpart.


Lidl loses the US boss - and falls further behind Aldi

Figures prove the popularity of Trader Joe's: The "American Customer Satisfaction Index" of the University of Michigan annually surveys the customer satisfaction of Americans in the retail sector. With an approval rating of 86 percent, Trader Joe's occupies the top spot among a total of 19 major US retail traders, as the index operators announced a few days ago. The discounter thus overtook the long-standing first-place finisher Publix.


Compared to its competitors, Trader Joe's has a much smaller branch network. The Aldi subsidiary operates over 600 stores nationwide. By comparison, Publix has almost 1500 branches, Kroger after all, around 1200 shops. But Trader Joe's announces new branch openings almost every week. Analysts counted more than 50 new stores last year alone – the year before there were 34 stores.


At the same time, the number of customer visits is increasing. In the first half of 2025, Trader Joe's recorded growth of 6.2 percent per store compared to the same period last year. For classic US supermarkets, on the other hand, this figure rose by only 1.2 percent, according to figures from the data analysis company "Placer AI".


Retail analyst Neil Saunders of the consulting firm Global Data sees one reason for this in the business model. "Trader Joe's does not invest in expensive and unprofitable e-commerce. It has smaller branches with fewer parking spaces, which reduces rental costs," he says. Trader Joe's is also focusing on a smaller assortment. "This means that it generates enormous volume for the products it has in stock." This allows the retailer to keep prices low, says Saunders.


Highest take-up per area

In the current period, the low prices are particularly well received by US consumers. The high cost of living is a nuisance for many Americans. US President Donald Trump had repeatedly promised during the election campaign to noticeably reduce the costs of supermarket shopping. But food inflation is stubbornly persisting, also because of the recent high US tariffs on individual products.


From the point of view of Julie Averbach, author of a book about the chain's success, this is only one side of the success. Unlike its competitors, Trader Joe's manages to turn actual weaknesses of discounters into strengths. "In many grocery stores, private labels have a bad reputation. They are considered cheaper and lower-quality alternatives to national branded products," says Averbach.


"At Trader Joe's, however, private labels are packaged in eye-catching designs, which gives them the appearance of luxury," says the author.


More than a store, Trader Joe’s is a sensory destination. As the Disneyland of the grocery world, it pairs friendly faces with a festive atmosphere to ensure that every visit is an event, not just a chore.


Instead of standardizing the design concept for all locations, Trader Joe's displays handmade signs in each store. "The brand breaks with many norms of the food industry," Averbach summarizes.


Since its founding in 1967, Trader Joe's has relied on a different concept than its competitors. Founder Joe Coulombe mainly offered delicacies. His target was the growing layer of educated but price-conscious consumers in California.


In 1979, the then Aldi Nord owner Theo Albrecht acquired the company. Under the aegis of his family, Trader Joe's professionalized its own-brand private label strategy: By purchasing directly from producers and dispensing with branded items, the chain was able to offer its goods at discounter prices.


Today, Aldi Nord looks almost enviously at the success of Trader Joe's. Aldi Nord once also had a cult bag. When the discounter was still a reliable profit machine in the 1970s, he commissioned the artist Günter Fruhtrunk to design the striking shopping bag with the diagonal blue block stripes. But those days are over.


In the recently published balance sheet for 2024, the group reported a net loss of 839 million euros on sales of 29.3 billion euros. In the previous year, the bottom line was still a profit of 993 million euros.


However, Aldi Nord emphasizes that the loss is largely due to high depreciation. Depreciation and amortization at Group level totalled 2.1 billion euros, a significant part of which comes from revaluations of real estate. According to the company, however, increased advertising expenditure and rising costs also had an impact on the earnings situation. Earnings before interest, taxes, depreciation and amortization amounted to just under 1.6 billion euros.


Aldi Nord is particularly concerned about the view into individual markets. For example, the business in France, the second most important country with a turnover of 5.3 billion euros, has not yielded any money for years. And because numerous stores are being modernized, heavy investments must be made there at the same time. The Polish market, with a turnover of just over one billion euros, is also still in the red.


Probably the biggest restructuring in the company's history

In the core market of Germany, with sales of almost 14 billion euros, Aldi Nord grew by only 2.7 percent in 2024 and thus slower than the overall market, which grew by three percent, as the company itself admitted. But in 2025, Aldi Nord regained significant market share in Germany.


The Aldi Nord Group is entering a new era under CEO Nicolás de Lope. Inheriting a legacy of massive reform from his predecessors, Hufnagel and Heußinger, de Lope must now navigate a business that has been fundamentally redesigned. Key to this evolution was a strategic pivot toward fresh assortments and centralized global purchasing, supported by a departure from the group’s traditional marketing restraint. De Lope’s leadership will be defined by his ability to make this digitized, streamlined structure commercially viable for the future.


But there is also increasing competition in the US market, from within his own family. Because Aldi Süd is currently one of the fastest growing retailers in the United States. By the end of the year, Aldi plans to open 180 new stores in 31 states. This would mean that the discounter would then operate almost 2800 stores in the USA and approach its long-term goal of 3200 stores by the end of 2028.


Aldi Süd has not yet built up as trendy an image in the USA as Trader Joe's. But in times of a high cost of living, US consumers are paying even more attention to prices.


However, management professor Michael Roberto assumes that Trader Joe's can hold its own. Roberto says he is impressed by how well the company has "built a moat around its castle", not least with the shopping bag as a status symbol. Just in time for the upcoming Easter business, the retailer wants to launch a new collection of its small cloth bags.



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