(March 16, 10:20 a.m.) Riding a wave of unprecedented consumer penny pinching on everything from apples to olive oil, Aldi is spreading its hard discount appeal throughout the U.S.
The privately held German chain, which first came to the U.S. in 1976, is on a growth spurt when most other chains are holding steady or cutting store numbers.
“We’ve experienced increased foot traffic and increased sales but what’s interesting is that even before the recession hit, we were already planning 100 new stores last year and we were planning more than 75 new stores this year,“ said Tina-Marie Adams, chief spokeswoman for Aldi Inc., Batavia, Ill.
She said the actual number of new stores in 2009 will be closer to 100.
The chain is about to celebrate its 1,000th store in the U.S. and has stores in 29 states, many in the Midwest and Northeast. Aldi doesn’t give out sales figures, but www.planetretail.net, which specializes in retail industry data, estimated 2008 sales of Aldi at $7 billion, compared with $70 billion for Kroger. Kroger is the largest U.S. traditional supermarket, though Wal-Mart is the largest grocery retailer.
New markets for Aldi last year included Florida and Rhode Island. In 2010, Aldi plans to open its first Texas location.
In the face of the recession, Adams said that Aldi stores have been experiencing higher sales than ever.
“We’re experiencing fantastic sales and even more customers than we usually would,” she said.
Adams said Aldi’s private-label items are 40% less expensive than traditional supermarket store brands.
“You can spend $60 with us or spend $100 down the street for the same stuff,” Adams said. “Recession or not, who wouldn’t want an extra $40 in their pocket?”
Adams said Aldi considers the traditional supermarket to be its primary competition.
“It is the traditional supermarket shopper who you see making that choice — where is the first place I will shop?”
Aldi has 1,400 products in a typical store, up from about 500 products in 1976. Fresh produce offerings at, Aldi have grown from seven items in 1994 to 55 items in 2008.
Aldi stores offer about 90% of what is on a typical grocery list, Adams said.
Each new market the chain enters provides new opportunities for produce suppliers because much of the produce is supplied locally, Adams said.
“We have definitely accentuated fresh produce, meat, poultry and fish,” she said.
Adams said the economy is part of the reason for the chain’s growth.
“Since 1976, we have been through at least three recessions and in each of those periods, (Aldi) definitely experienced a boost … but the greatest testament to us is they stay once the recession subsides,” she said. “We have tremendous loyalty.”
Aldi redesigned its store format last year and changes include higher ceilings and greater refrigeration space.
“The stores are not bigger — they are 17,000 square feet and about 10,000 of that is retail space,” she said.
That compares with retailers like Kroger and Wal-Mart that might have 150,000 or 200,000 square feet per store, Adams said.