Aldi plans to open 100 new US stores this year

Aldi plans to open 100 new US stores 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 region. The private grocery store says it’s on track to become the third largest supermarket chain behind Kroger (KR) and Walmart (WMT) in terms of number of stores, by the end of 2022 2,500 stores in the US.
Aldi’s expansion comes as the coronavirus pandemic boosted grocery chains. While many restaurants are closed and consumers need supplies for food and groceries to eat at home, grocery store sales rose 7.9% in December from the same month in 2019, according to the most recent data from the U.S. Department of Commerce.

Aldi has a cheap business model and boasts that prices are up to 50% cheaper than traditional supermarkets. The stores are about 12,000 square feet smaller than a 40,000-square-foot U.S. supermarket. More than 90% of the brands Aldi sells are its own brands.

There are other quirks in the store as well. Buyer needs a quarter to rent a shopping cart. At checkout, cashiers rush their groceries away to unload their own groceries at a separate location away from the cash register.

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

Aldi opened its first U.S. store in 1976, but has invested more than $ 5 billion over the past few years to renovate existing stores and open hundreds of new stores.

But the company could be in a tougher environment in 2021 than last year. Grocery sales are expected to drop by 5% in 2021, according to UBS analyst Michael Lasser, with the advent of the coronavirus vaccine and as consumers return to more meals away from home.

Aldi also said on Wednesday that it would expand its range of pickups to 500 extra stores this year. Aldi currently offers pickup to customers at approximately 700 stores, and the chain has partnered separately with Instacart to deliver groceries from most locations.

Online sales, which include the pickup, were 21% of U.S. grocery sales in 2020, compared to 4% in 2019, according to Lasser.

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