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Aldi Resumes Aggressive Growth Plans in Grocery Industry

German Retailer Plans 100 New Stores This Year As It Sets Sights on Becoming Third-Largest US Chain

Photo Courtesy of wolterke.

Aldi, the German food retailer that owns Trader Joe's, is taking aggressive steps to expand its push into the bustling American grocery store market with plans to open 100 new stores this year and add curbside pickup to 500 stores.

The deep-discount grocer with more than 2,000 stores in 37 states, is turning its focus to Arizona, California, Florida and the Northeast this year. Aldi broke ground this week on a new distribution center and regional headquarters in Loxley, Alabama.

The expansion comes as U.S. grocery sales increased in the past year from Americans spending more time at home because of the pandemic and avoiding restaurant dining rooms. At the same time, the acceleration of online purchasing by consumers who want to avoid crowds during the coronavirus outbreak has more stores adapting their properties to expand curbside pickup.

For Aldi's the 564,000-square-foot site will be company’s sixth distribution center in the southern part of the United States, supporting stores in Alabama, southern Georgia, Mississippi, the Florida Panhandle and Louisiana, its 38th state.

Aldi, known for its low-cost model, entered the United States in 1976 with its first no-frills store in Iowa and plans to gain a toehold in the largely fragmented grocery-store industry. Owned by Albrecht Discount — hence the “Aldi” name — the namesake stores and the Trader Joe’s chain only offer house-brand products.

Aldi’s game plan has always been to lure customers away from traditional American grocers that range from mega chains such as Kroger and Albertsons to large regional brands to corner mom-and-pop grocers in what has become a $1.04 trillion industry.

Though Aldi’s business is considered an “essential” one during the pandemic and has been allowed to stay open when so many other retailers were forced to temporarily close, it had to move quickly into curbside service. By adding another 500 pickup areas to its mix, Aldi will have curbside at more than half its stores with many offering same-day delivery as well.

Last year, Aldi opened 70 new stores, allowing it to cross the 2,000-store mark. The company with U.S. headquarters in Batavia, Illinois, claims it is on track to become the nation’s third-largest grocer behind Kroger and Albertsons by the end of 2022.

Once the Loxley distribution center is in place, Aldi said it expects to open as many as 35 new stores on Gulf Coast by the end of next year, beginning with two stores in Tallahassee, Florida, later this year.

The company did not respond to requests for more information.

Source: 2021 CoStar News.

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