Having had a Stateside presence since 1976, discounter Aldi recently saw its network grow to 2,000 stores across the United States. Now, the discounter is on a mission to develop a coast to coast presence in arguably the world's most competitive retail market, as its chief executive, Jason Hart, tells ESM.
"We’ve added more new stores than any other grocer in recent years and have been aggressively expanding, with the goal of becoming the third-largest US grocery retailer by store count by the end of 2022," Hart explains, adding that the discounter is keen to "close the geographic gap" as it expands across the country.
Gulf Coast
Building on its strong foothold along the East Coast and Midwest, as well as a burgeoning presence on the West Coast, Aldi is currently targeting the Gulf Coast, announcing its entry into Phoenix, Arizona, and plans to open a new distribution centre Loxley, Alabama, to serve new stores in that state as well as Louisiana, Mississippi and the Florida Panhandle.
In July, it announced that it is on track to open a total of 70 new stores this year.
"There is no limit to our growth potential," says Hart. "Our unique business model enables us to aggressively expand without compromising the value or experience we offer. In addition to expanding into new regions of the US, we are continuing to add new stores in our existing markets such as Chicago, Illinois; St. Louis, Missouri and Minneapolis, Minnesota.
"Every new store is an opportunity to serve new communities, which is a task we do not take lightly."
Retail Investment
As well as its value credentials – the retailer was recently named Value Leader in the Market Force Information Grocery Benchmark Study for the tenth consecutive year – Aldi USA has made investments in keeping with consumer demand.
A recently-introduced 40% increase in fresh food availability, for example, was a "direct response to our shoppers' feedback", says Hart.
"Our business model is rooted in simplicity and efficiency, and we optimise every aspect of our operation to create savings that we can pass on to our customers," he says. "Design, structural and mechanical changes were all part of our $5.6 billion (€4.7 billion) investment to update existing stores and warehouse facilities, as well as open hundreds of new stores."
In addition, having introduced grocery delivery in 2017, the retailer recently sought to double down on its digital offering with the expansion of Curbside Grocery Pickup, a click and collect solution, to close to 700 stores nationwide.
"As you might expect, expanding a service like our Curbside Grocery Pickup is a significant undertaking,” says Hart. “From reworking parking lot configurations to ensuring ample inventory and storage space to staffing considerations, the project involved employees from nearly all parts of the company. Our team met the challenge head on, and the rollout has been very successful."
Focus On Value
Hart joined Aldi back in 1993, straight out of college and was appointed CEO in 2015. In his time with the retailer, he admits that while, "competition within the [retail] category has intensified", not least from major players such as Kroger, Albertsons and Walmart, as well as new entrants like Lidl, Aldi's commitment to value has been unwavering.
"Aldi has grown significantly in the 27 years I’ve been with the company," he says. "We entered new areas like Texas, Florida, and California and deepened our roots in our existing markets. In addition to adding hundreds of new stores, we’ve also broadened our appeal by creating a modern market shopping experience, expanding our range of fresh and healthy items and above all, maintaining our status as the low-price leader in grocery."
The next edition of ESM will feature an extended interview with Jason Hart, in which he discussed the effect that coronavirus had on the discounter’s operations, retail competition, and much more. For more information on publication dates etc, contact steve@esmmagazine.com.
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
