https://www.reddit.com/r/NoStupidQuestions/comments/nej68b/can_someone_explain_how_a_business_like_in_n_out/gyhq6de

Efficiency is a huge factor. Take a look at how Aldi is run to see German efficiency in action. Lower prices than big box grocery, lower prices, equal or comparable quality. The entire store can be run by 2-3 people at a time, and they’re paid well.

Some examples of their efficiency:

– All products come in large boxes with a perforated side that can be torn off and placed on the shelf. Meaning restocking shelves is lightning quick vs unpacking and restocking individual items, and the boxes help keep everything grouped and organized. See picture: https://corporate.aldi.us/fileadmin/_processed_/8/b/csm_Interior_Simply_Nature_Endcap_Terre_Haute_58a28fd4f3.jpg

– Most of their products have bar codes on all sides of the package. This small enhancement means that cashiers can work very quickly by sliding items across the scanner without hunting for the barcode. I’ve watched their cashiers scan through an entire shopping cart in about a minute or less.

– Customers must bag their own items at a shelf area at the front of the store, which keeps the line moving faster. They also charge for bags which reduces waste and encourages people to bring reusable bags. They also put their empty boxes from shelf restocking into bins around the store, and you can grab these to use to box your purchases in, which I prefer to bags anyway.

– They don’t offer ten different variations of the same thing. If you want peanut butter, there will be one type of crunchy and one type of smooth. This means shoppers won’t get bogged down by analysis paralysis when comparing the price per ounce of ten different brands of peanut butter, which means shoppers will get in and out of the store faster.

– Due to the above, their stores can inhabit a much smaller footprint than a big box grocery, while still having the majority of everyday staples. That means lower real estate and infrastructure costs (maintenance, cleaning utilities, etc).

– Speaking of brands, the vast majority of their products are in-house brands. They will have some popular name brand items for some things, but for the most part, even if you see a brand on an item, it’s almost always an in-house brand. For example all their Mexican food will be under a ‘Casa Mamita’ brand. They are directly sourcing their food from producers and cutting out the middleman. Everything I’ve had from them is quality. The same is true for most grocery stores, of course; there’s almost always a ‘Kroger Brand’ item available cheaper than the name brand stuff. But Aldi is almost ALL ‘house brand’, which keeps costs down.

– Requiring a quarter to unlock a shopping cart means people return them to the corral themselves. They don’t need to pay for cart wranglers.

– When the store is not busy, cashiers themselves stock shelves. They can do this quickly because of my first point above.

I’m sure there’s much more going on behind the scenes regarding their inventory and logistics operations, considering how much efficiency is visible on the front end.

I used to run inventory and logistics for a retail chain, and the first time I shopped at an Aldi I damn near got an efficiency boner after seeing how the place is run.

All of the above means lower prices than competitors, while paying employees more, without sacrificing quality.