In 2017, ALDI said that it would invest $3.4 billion to accelerate store openings, with a goal of growing from 1,700 locations to a 2,500-store footprint by 2022. But the pandemic put a kink in that plan in 2020, with many of those planned openings taking a backseat to getting product on shelves and expanding contactless fulfillment options for shoppers too scared to enter physical locations.
So where does that evolution stand now?
“It is no secret that the pandemic created shifts in consumer shopping habits, and more specifically, how people shop,” Patton says. “But our efficient business model allows us to react in real time to meet consumer needs and preferences.”
Part of that quick reaction includes leading the United States in new store openings. In early 2022, the discount grocer revealed plans to open 150 new stores by the end of the year. While the retailer was able to open and remodel 139 locations last year, that’s still more new openings than any other grocer in the country, according to a new report from JLL, a Chicago-based professional services firm. ALDI is now the third-largest grocer in the United States by store count, with a current total of 2,285 stores.
ALDI currently has its sights set on establishing a dominant presence in the Sun Belt, a swath of the United States that has attracted scores of new residents since the pandemic. Last month, the retailer opened another regional headquarters and distribution center, in Loxley, Ala., which will ultimately serve as many as 100 stores across the Gulf Coast. Historically, ALDI distribution centers have been designed to service 70 to 75 stores in a 150-to-200-mile radius.
“At a time when inflation is putting pressure on American wallets, we believe our mission to save people money on the food and products they need is more important than ever,” says Heather Moore, ALDI divisional VP for the Loxley region. “We are thrilled to see so much customer love for the 20 stores we’ve opened in the Gulf Coast area in the last year alone. Once they see the quality, selection and value ALDI offers, they keep coming back. That’s why we’re committed to providing our customers the lowest possible price and the best possible value — that’s something that will never change.”
The 564,000-square-foot Loxley facility (most ALDI DCs range between 400,000 to 525,000 square feet) is equipped to service stores across Louisiana, Alabama, Mississippi and the Florida Panhandle. In total, the 100 stores that will be supported by the Loxley facility represent an opportunity to reach more than 8 million customers.
As the company's sixth regional headquarters in the southern United States, Loxley aims to support the grocer’s rapid expansion in the region. ALDI is now operating 30 stores in the Gulf Coast, having opened 20 stores in the area in the past year alone. It plans to add another 13 stores in 2023, including one in Fairhope, Ala., that is slated to open on March 2. Other stores in development include locations in Tampa and Callaway, Fla.; Flowood and Hattiesburg, Miss.; and in the Baton Rouge, La., area.
Driving all of this growth is a fervent customer base: A new report from Los Altos, Calif.-based Placer.ai shows that ALDI saw some of the greatest gains in foot traffic during the fourth quarter of 2022. Specifically, the grocer saw store traffic increase 6.8% YoY and 30.2% Yo3Y – in large part thanks to the brand’s ongoing U.S. expansion.
“Within grocery, there are two subcategories that generally overperformed in 2022: those that serve as a primary one-stop shop for the bulk of grocery needs, and those with a value orientation,” explains Ethan Chernofsky, VP of marketing for Placer.ai. “The latter segment also benefited from the massive expansions in overall footprint for some of the leaders within that group. Even as the impact of inflation dissipates, there is ample reason to expect both of these groups to continue to show strength.”
The other part of ALDI’s value proposition for shoppers comes from the design of its smaller, easier-to-shop stores.
“At ALDI, we offer a store experience that is fast, efficient and fun,” notes Joan Kavanaugh, VP of national buying at ALDI. “A typical store is approximately 12,000 square feet of retail space, making ALDI stores easier and quicker to navigate. Every ALDI has a similar easy-to-shop layout, so it feels familiar to customers no matter where in the country they’re shopping.”
According to Kavanaugh, the company is working to make the shopping experience “even more convenient by remodeling stores in select markets to include self-checkout lanes.
“So far, the customer reaction has been extremely positive, and shoppers are excited about the added option for quick shopping trips,” she adds.