Aldi Expands In US, Promises Low Prices

Aldi’s U.S. CEO Joson Hart reaffirmed his commitment to sell his merchandise at the lowest possible prices. In a letter to customers. He says that “no matter what happens in the world around us, Aldi will always be the low-price leader in every community we serve.”

Aldi is a German discount grocery store that features high quality private label products. Prices are always low. 90% of the products sold are their own-brand and the company has grown rapidly in the US in the last few years. The announcement is really a reaffirmation of a low-pricing pledge made in May 2020, the beginning of the COVID-19 virus scourge.

Monthly increases in the food-at-home index have been steep so far this year, rising 1.5% in March, 1.4% in February and 1% in January. BLS notes that all six major grocery-store food group indexes saw price increases in March.

There are now about 2200 Aldi stores in the United States, and there will be 2300 by the end of the year. The company just opened in North Dakota, the 36^th state and Arizona the 37^th state. (Reminds me of the drive Walmart WMT had to be in every state of the Union.) There are over 11,000 stores world-wide including Trader Joe’s units in the United States.

In Aldi’s case there is a $5 Billion, five-year expansion plan for the U.S. The plan was unveiled before the pandemic and now is meeting its target. The company entered with its first stores in 20xx. The first store was opened in Iowa in 1976.

Lidl, Germany’s largest discount grocery chain, who entered the United States in 2017 now has about 170 stores in operation. Some are close to Aldi stores; others are standalone units. Their expansion was initially expected to be more rapid, but a change of management slowed the drive. A recent opening of a Lidl unit in Manhattan’s Harlem district suggests that the company is looking at some urban locations. Currently the company has 11,200 locations European countries and the United States.

POSTSCRIPT: Discount grocery stores, featuring private labels and striving for high quality groceries are certainly going to grow faster in the current high-cost environment. We salute Mr. Jason Hart for his bold reassurance to his customers that shopping at Aldi will be low priced. It is a reassurance that we need from other food stores in the current environment.

Source: Forbes