OpinionMarkets & Economy

Is the rise of discount grocer Aldi a warning sign for real estate?

What the industry can learn from a successful low-price, simple-experience value proposition
  • Consumers still want experiences that exceed their expectations.
  • The full-service real estate model needs to change to stay relevant.

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In the wealthy suburb of Carmel, Indiana, upscale, full-service grocery stores are being built at breakneck speeds. The newly opened Kroger offers $80 cakes, gobs of organic produce and aisles of gluten-free products. Live music is performed from the balcony of the café. This all seems to bode well for the real estate industry. The aisles full of shoppers with gourmet deli items, freshly custom-packaged steaks and expensive wines indicate a strong economy. The number of shoppers willing to overpay on their grocery bill for a full-service, delightful experience (in a gorgeously lit store with premium shopping carts and wide aisles) tells us that consumers are still willing to pay premium prices for excellence in experience. That sounds an awful lot like what the entire real estate industry is hoping for. And yet another type of grocery store is vying for -- and earning -- grocery shopper market share. It’s a far cry from the Kroger way. Filled with mostly store-brand i...