Aldi did not announce where the 70 new stores would be, but will enter Arizona, its 37th state, later this year, with four new stores in the Phoenix area. Aldi will also open a new regional headquarters and distribution center in Loxley, Alabama, to distribute to stores in Alabama, Florida and Louisiana.
Aldi has a low-cost business model and boasts that its prices are up to 50% cheaper than traditional supermarkets. The stores, at around 12,000 square feet, are much smaller than a typical 40,000-square-foot American supermarket. More than 90% of the brands that Aldi sells are their own private brands.
There are also other quirks in the store. Buyers need a room to rent a shopping cart. At the end of the purchase, the cashiers pull buyers away, waiting for them to pack their own groceries in a separate place from the cash register.
Aldi opened its first store in the United States in 1976, but in recent years has invested more than $ 5 billion to remodel existing stores and open hundreds of new stores. Its close competitor, Lidl, another German grocer with a similar business model, is also competing to grow in the United States. Lidl entered the country in 2017 and has around 100 stores.
“The economic shock of the coronavirus crisis is likely to fuel the grocery trade somewhat,” Coresight Research said in a research note in June. “We see this support growth in the large Aldi and Lidl discounts, as well as differentiated value retailers like Grocery Outlet.”
Aldi does not share financial data, but some analysts say the pandemic and recession are cheering on Aldi.
“Aldi may be the best-positioned retailer to grow in the United States,” said Diana Sheehan, vice president of market research firm Incontext Solutions. “They have a pricing strategy that benefits consumers in a recessive economy,” and Aldi is also “one of the most operationally efficient retailers in the country.”
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