Aldi plans to open 100 new stores in the United States this year

Aldi plans to open 100 new stores in the United States this year

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Aldi, which already has more than 2,000 stores in 37 states, said its new stores will be located in Arizona, California, Florida and the Northeast. The grocer said he is on his way to becoming the third largest supermarket chain behind Kroger (KR) and Walmart (WMT) in terms of store count, with 2,500 stores in the United States at the end of 2022.
Aldi’s expansion comes at a time when the coronavirus pandemic drives supermarket chains. With many restaurants closed and consumers stocking food and essentials to eat at home, supermarket sales increased 7.9% in December compared to the same month in 2019, according to the latest data from the U.S. Department of Commerce.

Aldi has a low-cost business model and boasts that its prices are up to 50% cheaper than traditional supermarkets. At about 12,000 square feet, its stores are much smaller than a typical 40,000 square foot American supermarket. More than 90% of the brands that Aldi sells are own brands.

There are other peculiarities in the store as well. Shoppers need a room to rent a shopping cart. At the checkout counter, cashiers rush customers to pack their own purchases in a separate location, away from the cash register.

Aldi’s close competitor, Lidl, another German grocer with a similar business model, is also racing to grow in the United States. Lidl entered the country in 2017 and has more than 100 stores. In August, Lidl announced that it would open 50 new stores by the end of this year.

Aldi opened its first store in the United States in 1976, but in recent years it has invested more than $ 5 billion to renovate existing stores and open hundreds of new ones.

But the company may face a tougher environment in 2021 than it did last year. Food sales are expected to drop 5% in 2021, according to UBS analyst Michael Lasser, with the arrival of the coronavirus vaccine and with consumers returning to eating more outside the home.

Aldi also said on Wednesday that it will expand its sidewalk pick-up offer to an additional 500 stores this year. Aldi currently offers pickup on the sidewalk for customers in around 700 stores, and the chain separately has a partnership with Instacart to deliver groceries from most locations.

Online sales, which include sidewalk pick-up, accounted for 21% of food sales in the United States in 2020, compared to 4% in 2019, according to Lasser.

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