Dive Brief:
- Aldi plans to open four stores in the Phoenix area this year, its first locations in Arizona, according to a press release. The expansion is part of an initiative by the German supermarket chain to add more than 70 stores to its U.S. fleet this year.
- The company also intends to begin constructing a new regional headquarters and distribution center in Loxley, Alabama, in 2021. The facility will serve new stores in southern Alabama and the Florida Panhandle as well Louisiana, which is set to become the 38th state where Aldi operates.
- Aldi, which is in the midst of a $5 billion plan to open new stores and remodel existing ones in the United States, has crossed the 2,000-store mark and now has locations in 36 states.
Dive Insight:
Aldi’s plan to enter Arizona and Louisiana is part of an effort by the discounter to further engrain its no-frills approach to selling groceries in the minds of American shoppers.
News about the company's entry into Arizona has been percolating since 2017, when local media revealed the company was building a distribution center in the town of Goodyear. Aldi did not confirm that facility in this latest announcement, but it will open a store in Goodyear later this year, according to The Arizona Republic. That location will open in December along with another one in Gilbert. Stores in Chandler and Peoria will open in November.
Aldi is also reportedly developing around 10 additional locations around the Phoenix area as it targets a growing market during an economic recession. The discounter will hope to rattle market share leader Fry's, which is owned by Kroger, as well as Safeway and specialty chain Sprouts Farmers Market.
Aldi, which opened its first store on U.S. soil in Iowa in 1976, has been steadily opening new stores and has its sights set on becoming the third-largest grocer in the country by 2022, after Walmart and Kroger. Aldi said in February that it planned to open two new stores on Long Island during the first half of 2020, bringing the number of its existing or planned stores in the area to eight. In March Aldi paid $7.8 million for six Florida locations formerly run by Lucky’s Markets in a bankruptcy auction held by the retailer.
In May, Aldi pledged to keep prices as low as possible despite the squeeze on the food chain caused by the pandemic. That same month, the company said it would offer curbside pickup service to customers at 600 of its U.S. stores by the end of July in partnership with Instacart, building on a pilot that began in 2018.
Aldi is pressing forward with its growth plans as fellow German grocery store operator Lidl also moves ahead with an effort to expand its presence on the American retail landscape. Lidl, which has been operating in the United States since 2017, opened its 100th U.S. store in May near Atlanta. Like Aldi, Lidl is also planning to open a new regional distribution facility in the South to support its expansion.
Lidl has consistently seen foot traffic in its stores rise on a month-over-month basis since the pandemic swept the nation in March, according to data from Placer.ai, an analytics company that gauges activity at retailers. By comparison, Aldi has recorded drops in visits to its locations over the same period.
