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0SACHA PFEIFFER, HOST:
Where do you shop for groceries? It's becoming harder to put an affordable meal on the table in the U.S., so more Americans are looking for deals. In the first installment of our series What's Eating America, where we look at issues of food and affordability, NPR's Joe Hernandez tells us about the rise of budget grocery stores.
JOE HERNANDEZ, BYLINE: Shopping at Aldi was different for Rachel Negro-Henderson when she started coming here regularly early in the pandemic.
RACHEL NEGRO-HENDERSON: You'd run into somebody from, like, your neighborhood here, and they would be like, oh, I'm just grabbing a tomato. It was like, almost like there was, like, a shame about coming here.
HERNANDEZ: But she says attitudes changed after food prices went up.
NEGRO-HENDERSON: Now it's like everyone's like, yeah, I'm saving money. I might as well come here. I'm getting the same product.
HERNANDEZ: On a recent Monday morning, Negro-Henderson is one of the first customers through the door at the Aldi in Belmar, New Jersey. She's here to do her weekly shopping for her family of five.
NEGRO-HENDERSON: So we're going to be doing shrimp and pasta. It's a lemon pasta this week. We're doing a big chicken pan meal - 'cause it's gonna be rainy - with lots of vegetables.
HERNANDEZ: The German-owned discount grocer has become one of the family's go-to stores for food shopping. Negro-Henderson's husband, Rich Henderson, says they were drawn in by Aldi's low prices and its GMO-free store-brand items.
RICH HENDERSON: And then, the more we shopped here - the more products we tried - we realized quality-wise, you're not really sacrificing anything.
HERNANDEZ: Food prices across the country are way up. Inflation, the threat of tariffs, the war in Iran and corporate cost-cutting measures are all making a typical trip to the grocery store more expensive. Grocery industry analyst Phil Lempert says many shoppers have just started going where the prices are lowest.
PHIL LEMPERT: Consumers are just to the point where - give us a break. This is food. You don't screw around with our food.
HERNANDEZ: A survey released by the market research firm AlixPartners in December found that a majority of respondents expected to spend as much or more on food this year, but also said they intended to seek out cheaper groceries and avoid impulse buying. That's created an opening for budget grocery stores like Aldi, Lidl and Grocery Outlet.
LEMPERT: Which are basically lower-cost grocery stores because they don't have the overhead that your conventional 40,000-square-foot store has. They have less employees.
HERNANDEZ: There's also warehouse clubs like Costco and Sam's Club, which boast huge discounts and have been talking up their food offerings too, like in this 2024 Costco ad.
UNIDENTIFIED PERSON: In this corner, we have fresh produce, bakery and meat.
HERNANDEZ: Shoppers are also warming up to less expensive store brands. According to the Private Label Manufacturers Association, sales of store-brand items last year increased nearly three times faster than sales of national name-brand products. But that's not to say that there aren't drawbacks to budget grocery stores. As much as Rachel Negro-Henderson loves Aldi, she says she gets some ingredients at other supermarkets or her local deli.
NEGRO-HENDERSON: There's still things, as a good New Jersey Italian, that I will only buy from another store - lunch meat, stuff like that.
HERNANDEZ: But the limited selection doesn't seem to be slowing down interest in the store either. Aldi says it brought in 17 million new U.S. customers last year and opened nearly 200 new stores. Phil Lempert says it's a sign that frugal grocery-buying habits are here to stay.
LEMPERT: People are using shopping lists more than ever before. People are shopping more online because they can compare prices easier. People are tired of getting ripped off on food prices.
HERNANDEZ: Lempert says the old ways of shopping are toast. Joe Hernandez, NPR News, Belmar, New Jersey.
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