Posts Tagged “Aldi”
Discount grocery retailer Aldi announced recently it would invest $3.4 billion to expand its U.S. store base to 2,500 by the year 2022.
The German grocer currently operates 1,600 stores in the United States and said earlier this year it would expand to 2,000 by the end of 2018 at a cost of $1.6 billion.
The $5 billion move would have Aldi as the third-largest U.S. food retailer by store count behind Walmart and Kroger.
“It should absolutely be more than scary to traditional grocers and retailers,” Mikey Vu of the consulting firm Bain & Co., was quoted as saying in a June 12 article in The Wall Street Journal. Vu said Aldi has improved its stores and products in recent years, and is attracting a larger mix of shoppers.
A point of differentiation by Aldi and other discounters, such as Lidl, which opened its first U.S. locations earlier this month, is their longstanding use of store brands to keep prices down, a common practice in Europe. U.S. consumers have traditionally been more brand loyal, but that is beginning to erode, especially with the millennial generation.
Millennials “are value-oriented and don’t hold the same stigmas about private-label items that older generations do,” Mike Paglia, director of the research firm Kantar Retail, was quoted as saying in the WSJ article.
“As we continue to expand and grow, our purchasing power continues to increase and allows us to bring products at better prices for consumers,” Scott Patton, Aldi’s head of corporate buying, said in an interview with CNBC.
Aldi said the new store openings would create 25,000 jobs over the next five years.
Aldi operates stores in 35 states, using a simple, cost-effective approach to grocery shopping to save shoppers on their grocery bills. The grocery chain’s website states shoppers have found that switching from national brands to ALDI exclusive brands can save them up to 50 percent on their weekly must-haves. More than 40 million customers each month shop with Aldi’s streamlined approach.
A Market Force study of 7,200 shoppers conducted online in April ranked the Monrovia, Calif.-based Trader Joe’s first, the Lakeland, Fla.-based Publix Super Markets Inc., second and the Batavia, Ill.-based Aldi Inc., third, according to a Trader Joe’s news release.
The survey studied consumers’ grocery shopping habits and preferences, rating Trader Joe’s at 78% in consumer satisfaction and Publix at 74%.
Rounding out the top fiver were Aldi, Hy-Vee Food Stores Inc., West Des Moines, Iowa, and H.E.B., San Antonio. Among the top brands were Boise, Idaho-based Albertson’s and WinCo Foods and Bentonville, Ark.-based Sam’s Club who made this year’s list after failing to garner enough mentions in 2014, according to the release.
Publix and Trader Joe’s led in many areas, including cashier courtesy, fast checkouts and cleanliness, while Aldi, WinCo and Costco Wholesale Corp., Issaquah, Wash., took the top spots in the value category.
Shop-Rite Supermarkets, Edison, N.J., scored highest for sales and promotions while H.E.B, Hy-Vee and Kroger Co., Cincinnati, performed well in most areas.
Other study findings: nearly half prefer to buy organic products, 28% are buying prepared foods at least weekly, up 10% from 2014 and 39% have used a grocery app, primarily for coupons.
Louisville, Colo.-based Market Force is a global customer intelligence company that provides information for retailers, restaurants, financial institutions, entertainment studios and consumer packaged goods companies.