Grocery chain Aldi plans more United States stores

In addition to its planned $3.4 billion capital investment which comes with 25,000 new jobs, the supermarket company also said it plans to spend $1.6 billion to remodel 1,300 of its existing stores by 2020, according to the company.

Jason Hart, CEO of Aldi in the United States, said: "We pioneered a grocery model built around value, convenience, quality and selection and now Aldi is one of America's favourite and fastest-growing retailers". On June 15, another German discount grocer, Lidl, will make its USA debut, opening the first of 20 stores it plans to open this summer in Virginia, North Carolina and SC.

The US expansion by the German private-label giants could put more pressure on conventional retailers, such as Wal-Mart Stores and Kroger to lower their prices.

It already was planning on expanding to 2,000 stores by the end of 2018.

Aldi expects to become the third largest grocery store by count in the USA and serve 100 million customers per month after the expansion.

"Aldi is growing into an increasingly considerable threat to American grocery staples like Walmart, Kroger and Whole Foods, among other national and regional grocery store chains", noted an article last month in Zacks Investment Research, which called Aldi the "grocery store of the future.' "Walmart even reportedly tested a 'price-comparison test" in almost 1,200 of its USA stores in the hopes of closing the price gap between itself and its competitors, including Aldi".

Low-priced grocery chain Aldi said it plans to add more stores in the US over the next five years, meaning more competition for traditional grocers, Walmart and organics-focused chains like Whole Foods.

Analysts expect Lidl could build up to 1,000 stores by 2021, indicating German hard discounters could soon be gaining on Walmart in terms of total US food stores operated. Aldi also plans to increase its offering of fresh and sustainable seafood, specialty wines and cheeses, organic items from its SimplyNature line and award-winning Little Journey baby products.

Will Aldi offer American customers anything different?

"There's a tremendous amount of value at stake that will shift to Lidl and Aldi", said Kent Knudson, a Bain & Company partner.

  • Zachary Reyes