Aldi is the 8th largest retailer in the world with $82 billion in sales. Aldi has a tremendous business model and price is only one component. 1) Private label products that look and taste as good as the branded products they mimic, 2) well stocked stores, 3) friendly, and inspired employees (not just because they get paid more -- but from a great culture and training), (4) limited assortment but all the categories needed for any household are covered (5) convenient locations (6) price/value that can't be beat due in part to their low SG&A.
Just as the dollar channel has hurt Walmart, Walmart should be scared of limited assortment. However, instead of lowering their prices, I suggest they give up on that customer and invest in better stock service levels and the customer experience to take more of trips from "switchers" who also shop Walmart traditional supermarket competitors.
Lidl is the 4th largest retailer in the world with $94 billion in sales. Together with Aldi, they have taken huge chunks of market share in the UK. Now both German retailers, with stores that are nearly identical to each as well as business models, are expanding in America. Save-A-Lot hasn't expanded fast enough.
Convenience (speed of shopping as my friend Herb Sorenson has researched and written about) plus value is a winning formula for today's shopper and tomorrow's Millennial shopper too!