UPDATE: Nov. 23, 2020: Aldi’s new extra-large store in downtown Philadelphia is scheduled to open on Dec. 3, according to a press release from the grocer. The store will feature a 15,000-square-foot selling floor across six aisles and will be the chain’s eighth new location in Philadelphia since 2015 and 11th overall in the city. It occupies the ground floor of a 14-story residential building at 1300 Fairmont Ave. — Aldi's first store in a mixed-use development in the city.
Like other new and remodeled Aldi stores, the new supermarket will carry an expanded assortment of products that includes 40% more fresh food than older locations.
Dive Brief:
- Aldi is preparing to open a new store in Philadelphia that will occupy 25,000 square feet, a footprint that is about 50% larger than the average amount of space taken up by the German grocer’s locations in the United States, according to a report by WHYY radio.
- The new supermarket, set to open in November, is part of a growing number of new grocery stores that are popping up in Philadelphia as real estate companies press ahead with mixed-use developments in the city.
- The extra-large Aldi will be located at the base of a new project centered around a 475-unit apartment tower, reflecting the premium many people place on having easy access to a grocery store where they live.
Dive Insight:
Aldi’s decision to place a supermarket within a residential project reflects a trend among real estate developers in recent years to include food retailers within mixed-use projects with residential components. The fact that the new store will be among the German chain’s largest locations only underscores the importance grocers and neighborhood planners are placing on offering people the convenience of having a full-fledged supermarket just steps from where they live.
Apartment-dwellers have shown a willingness to pay extra to be able to walk from their homes to a food retailer. According to a study by RCLCO Real Estate Advisors, apartment buildings that contain a Whole Foods or Trader Joe’s bring in a 5.8% rental premium compared with other multifamily communities located close by. Although including a grocery store in a building can bring added construction costs, the developers have calculated that the extra rent they can collect by offering such an amenity to tenants is likely to compensate for the higher initial expenses.
Other examples of grocery stores within developments with substantial residential space that have opened recently include a Giant Food supermarket in Fairfax, Virginia and a Safeway in the Capitol Hill neighborhood of Washington, D.C.
According to WHYY, the extra-large Aldi coming to Pennsylvania’s largest city will feature six aisles and a fresh section that is 40% bigger than a typical Aldi location, which averages 16,400 square feet. The median size of a U.S. supermarket was 41,651 square feet in 2018, statistics compiled by the Food Industry Association show.
Aldi plans to open another 25,000-square-foot store in the Washington, D.C., area in 2022. It has also built stores abroad that are as small as 6,000 square feet, underscoring the company's focus on flexibility.
The new supermarket continues a string of new stores that in recent years have come to or been planned for Philadelphia, where the radio station said 56 grocery stores opened between 2015 and 2018. Amazon plans to open a grocery store in another new residential project located only about a mile from the new Aldi, according to the Philadelphia Business Journal. Lidl is also working on a new Philadelphia location, which was supposed to open in late 2020 but has been delayed to next year, WHYY reported.
Aldi has been on a tear in the United States and now operates more than 2,000 stores across the country. The company’s new store in Philadelphia is among more than 70 U.S. stores the retailer intends to inaugurate in 2020.
