Discount supermarket chain Aldi has announced its plans to add 800 stores nationwide by the end of 2028 through new openings and store conversions.
The company will invest more than $9 billion in a five-year national expansion plan. This will include nearly 330 new locations to strengthen the retailer’s presence in the Northeast and Midwest, as well as more stores in Southern California and Phoenix.
The acquisition of Southeastern Grocers and its Winn-Dixie and Harveys Supermarket banners will also support Aldi’s expansion in the Southeast. The firm plans to convert a significant number of Winn-Dixie and Harveys Supermarkets to its format alongside new store openings. The conversion process is expected to begin with about 50 locations in the latter half of this year.
“Our growth is fueled by our customers, and they are asking for more Aldi stores in their neighborhoods nationwide,” said Jason Hart, CEO of Aldi.
“With up to 40 per cent savings on groceries, new customers are inspired to try us out, and existing customers keep coming back. While price is important, we earn their loyalty by stocking our shelves with only the best products and offering a quicker, easier, and more enjoyable shopping experience.”
Neil Saunders, MD of GlobalData, said Aldi is “throwing down the gauntlet” to traditional grocery, as the expansion could cause “significant disruption and pain” for other retailers.
“The timing of the move is fortuitous as consumers, still reeling from hefty inflation in food, are actively seeking cheaper grocery baskets.
“Aldi has already taken advantage of this at many of its existing stores and has increased its local market shares, however, to benefit more fully it is increasing its store coverage,” Saunders continued.
According to the analyst, the retailer’s competitive edges include extremely competitive prices, a relatively simple offer that improves efficiency and protects margins, and enormous buying power as a global group.
“While stealing customers and market share poses a big threat to other players, Aldi’s influence on the market should not be underestimated. The company’s price leadership can force other retailers to reduce their own prices to compete. We have seen this play out in other markets, like the UK, and it has the potential to squeeze margins.”
Overall, the expansion is good news for consumers, but will ramp up competitive pressure in the grocery market, Saunders concluded.
