A sign hangs outside an Aldi grocery store in Chicago, Illinois.
Scott Olson | fake pictures
Discount store Aldi said Tuesday that it will open more than 70 stores by the end of the year, hoping to attract new customers and attract some of its rivals, such as Walmart and Kroger.
Expansion plans will bring stores to the Phoenix metro area for the first time, according to a press release. It will add more stores to states like New York, Texas, Kansas and California. The company will open a new regional headquarters and distribution center in Loxley, Alabama in 2021 to support growth along the Gulf Coast in southern Alabama, Louisiana, and the Florida Panhandle.
Aldi US is part of a privately owned German company, Aldi Sud, which opened its first stores in the United States in 1976. It serves value-conscious customers with private labels that cost less and low-cost business strategies, such as demanding customers making deposits. to get shopping carts to eliminate the need for employees around them. Stores have a smaller footprint and a more limited variety of items, which also reduces costs.
Even before the pandemic, Aldi US had high ambitions. It is in the midst of a five-year plan to become the country’s third largest supermarket, after Walmart and Kroger, by 2022 with 2,500 stores. To do that, the company said it would invest $ 5.3 billion to build hundreds of new stores, remodel old locations, and increase its food variety.
Aldi US CEO Jason Hart said in a press release that the company has made progress. So far, it has 2,000 stores in 36 states, not including the newly announced stores. He sped up curbside grocery picking and plans to have it at nearly 600 stores in late July. And it has increased the selection of fresh foods by 40% with more products, prepared foods, meats and organic products.
Walmart has more than 5,000 stores in all 50 states, including its membership-based Sam’s Club. Kroger has nearly 2,800 stores in 35 states and Washington, DC, but some are under other banners like Fred Meyer and Fry’s.
With the pandemic, Aldi has other factors that could work in his favor: Americans are spending more on food than usual, and are seeking deals due to rising prices, high unemployment, and economic uncertainty.
According to market research firm IRI, grocery spending increased approximately 10% at grocery stores and department stores, as of the week ending July 12 compared to the same period last year. In value chains, such as Aldi and Dollar General, it is even higher: closer to 15% to 20% year-over-year, according to the company’s analysis.
Food costs rose for the sixth consecutive month in June, according to the Labor Department. In April, prices Americans paid for groceries rose 2.6%, the biggest jump in a month in nearly 50 years.
Hart said in a statement that Aldi remains committed to offering value and has even lowered some prices as other supermarkets have increased them.
“This pandemic has reinforced the number of consumers who trust us for their grocery needs, and we are pleased to be able to support communities across the country with the lowest possible prices,” he said.
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