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Long branded as the low-cost, no-frills supermarket depot, Aldi has always sought to be the affordable neighborhood grocer for its customers. But in the past, it has done so with a lot less panache than its corporate cousin, Trader Joe's (the two companies are legally separate, but owned by the same German family). That’s about to change.
The company announced recently it would be investing $5 billion to remodel and expand its store count to 2,500 with the opening 700 new stores by the end of 2022. Coupled with store expansion is a remodeling effort to make the stores brighter, devote more space to fresh produce and expand its refrigeration section so the company can increase its fresh food selection by 40%.
If you’re wondering where this sudden customer altruism is coming from, look no further than Amazon and Walmart for answers. Aldi’s announcement comes at a time when other grocers are slashing prices, investing in organics and introducing convenience features, such as curbside pickup, to maintain their market share.
How Aldi keeps prices low
While Aldi may not have the cachet of a Whole Foods or the cult-following of Trader Joe’s, it has a small, but growing legion of fans who’ve discovered comparable private labeled staples at a fraction of the price of name-brand items. A majority of Aldi's products are packaged under private labels owned by the company, such as its SimplyNature line of organic foods and its liveGfree line of gluten-free pantry items. In some cases, these products are the same product sold at other stores, but packaged with Aldi's branding. In other cases, the products are unique to Aldi entirely. Prices vary by location, but generally, Aldi's prices are lower than those found in other grocery chains.
Aldi’s focus on organic and fresh foods
With its recently announced investment, Aldi will be expanding its Earth Grown brand, which offers vegetarian and vegan products, such as its Black Bean Chipotle burger, Kale Veggie Burger and Quinoa Crunch Veggie Burgers. People tend to favorably review the price and flavor of these items compared to veggie burgers from other brands, such as Morningstar and Dr. Praeger's.
Also, once known for only offering a sparse assortment of staple items, Aldi will now be offering more fresh and ready-to-eat items such as sliced mango and watermelon, single-serve packs of guacamole, strawberry kefir and kombucha.
Finally, Aldi plans to ramp up the availability of baked goods, such as whole wheat pita bread and gluten-free bagels, as well as a host of milk alternatives, such as organic almond milk and coconut milk.
By expanding its lines of natural products, Aldi hopes to shed its no-frills reputation and make genuinely healthy food more broadly available to the cost-conscious market.
The article, Aldi’s $5 Billion Expansion Means More Stores and More Organic Foods, originally appeared on ValuePenguin.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
