One of the US’ fastest-growing retailers is a German grocery chain that displays items in cardboard boxes and makes you deposit a quarter to get a shopping cart.
An Aldi store could be coming to your neighborhood sometime soon, as the discount grocer pushes ahead with its biggest-ever expansion in the United States, the WSJ reported. Aldi plans to open more than 225 US stores this year, bringing its total to around 2,600 locations by the end of 2025. That would make it the third-largest supermarket chain in the US by number of stores, after Walmart and Kroger.
Aldi has plenty of justification to keep expanding—its stores are packed at a time when grocery visits overall are stagnating. Customer trips to Aldi locations were up more than 7% in the first half of the year, compared to 1.8% growth for the broader industry, according to Placer.AI.
What’s the secret sauce?
Value: Roughly 90% of Aldi’s items are private label, allowing the grocer to set prices lower than national brands. For instance, in one NJ location, an Aldi’s 12.2-ounce box of Fruit Rounds is priced at $1.68. The cereal it’s, er, inspired by, Kellogg’s Froot Loops, costs $4.48 for a 16-ounce box, per the NYT.
Smaller-store format: Shoppers have become overwhelmed by the number of options in huge grocery stores. Aldi locations are much smaller than standard supermarkets, bringing cost savings and better alignment with consumer behavior. Aldi stores average about 20,000 square feet, while a typical supermarket is more than double that size.
“Treasure hunt” mentality: Similar to retailers such as TJX and Five Below, Aldi knows that consumers enjoy feeling like they’re on expedition when they shop. It constantly adds new surprises to its “Aldi Finds” aisle of rotating discounted goods.
But there are plenty of growing pains
For one, food manufacturers have bristled at Aldi’s dupes of their brand-name products—and taken legal action. Oreo-maker Mondelez sued the grocer earlier this summer, claiming its store-brand line “blatantly copies” products like Wheat Thins and Chips Ahoy! (It’s not the first food company to sue Aldi.)
And Aldi’s expansion could hit a speedbump in the lucrative Northeast market, which execs acknowledge is “challenging.” A major test of Aldi’s appeal will be a bigger-format store near Times Square in NYC, slated to open next summer.