Aldi fires $3.4 billion shot in US supermarket wars

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Aldi fires $3.4 billion shot in US supermarket wars

Post by J-Man » June 12th, 2017, 8:03 am

  • Aldi said it would invest $3.4 billion to expand its U.S. store base to 2,500 by 2022.
  • The move raising the stakes for rivals caught in a price war.
  • German rival Lidl will open the first of its 100 U.S. stores on June 15.
Full article on CNBC website.

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Re: Aldi fires $3.4 billion shot in US supermarket wars

Post by jamcool » June 12th, 2017, 9:41 am

It sounds like Tesco and Fresh n Easy allover again. Aldi isn't doing very well in SoCal and would get their teeth kicked out in a number of markets

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Re: Aldi fires $3.4 billion shot in US supermarket wars

Post by wnetmacman » June 12th, 2017, 2:49 pm

J-Man wrote:
  • Aldi said it would invest $3.4 billion to expand its U.S. store base to 2,500 by 2022.
  • The move raising the stakes for rivals caught in a price war.
  • German rival Lidl will open the first of its 100 U.S. stores on June 15.
Full article on CNBC website.


The article really doesn't mention where Aldi will expand, just that they will. I'm suspecting the south will finally see more stores.

jamcool wrote:It sounds like Tesco and Fresh n Easy allover again. Aldi isn't doing very well in SoCal and would get their teeth kicked out in a number of markets


If Aldi is ready to expand, they feel like they can do well. Remember, they've been in the upper Midwest for almost 40 years. They have been wildly popular there, even though they're running 10000 square foot stores. I don't think they're losing as much as you think.

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Re: Aldi fires $3.4 billion shot in US supermarket wars

Post by pseudo3d » June 12th, 2017, 3:16 pm

wnetmacman wrote:
J-Man wrote:
  • Aldi said it would invest $3.4 billion to expand its U.S. store base to 2,500 by 2022.
  • The move raising the stakes for rivals caught in a price war.
  • German rival Lidl will open the first of its 100 U.S. stores on June 15.
Full article on CNBC website.


The article really doesn't mention where Aldi will expand, just that they will. I'm suspecting the south will finally see more stores.

jamcool wrote:It sounds like Tesco and Fresh n Easy allover again. Aldi isn't doing very well in SoCal and would get their teeth kicked out in a number of markets


If Aldi is ready to expand, they feel like they can do well. Remember, they've been in the upper Midwest for almost 40 years. They have been wildly popular there, even though they're running 10000 square foot stores. I don't think they're losing as much as you think.


Lidl has far more to compare to with Fresh n Easy than Aldi does (expensive entry in the wrong places, demonstrated lack of knowledge of grocery consumers, confused marketing). With how cheap the stores are to build and run, they can carpet-bomb a market with dozens of stores, close the ones that won't work, and still come out ahead.

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Re: Aldi fires $3.4 billion shot in US supermarket wars

Post by storewanderer » June 12th, 2017, 6:31 pm

I think Aldi can easily get up to that store count. They won't drive any other grocers out of business per se, but they will be another factor that helps push already poorly performing chains toward the brink in certain markets. Aldi Stores never do much volume, operate limited hours, and operate with limited mix/employee counts. They supplement but do not replace a normal store.

Even if they do not make it in SoCal, they can still get up to that store count expanding in other parts of the US.

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Re: Aldi fires $3.4 billion shot in US supermarket wars

Post by CalItalian » June 12th, 2017, 11:28 pm

jamcool wrote:Aldi isn't doing very well in SoCal and would get their teeth kicked out in a number of markets
I am a participant in a couple of online Southern California coupon boards. Aldi puts a lot of high value markdown stickers on meat. That's the big draw for couponers. I've been able to get packages of 2 lb. boneless, skinless chicken breasts for well under $1 each. Or $1 for 1 lb. of hamburger patties (although I've also been able to purchase for the same price on markdown at Ralphs occasionally). Dozen large eggs are routinely under $1, sometimes as low as .69 (although a Ralphs I frequent had them for .49 last week, 1/2 off the advertised price). Or the first day of their new ad when they markdown a number of products for quick sale. You will see a small line outside Aldi before the store opens on that Wednesday. That's all they attract at Aldi in Southern California, us bottom feeders (not unlike Fresh 'n Easy).

People view and treat Aldi more like a Grocery Outlet or 99 Cents Only! store competitor not of any traditional supermarket. They have a serious perception problem in SoCal.

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Re: Aldi fires $3.4 billion shot in US supermarket wars

Post by storewanderer » June 13th, 2017, 8:26 pm

I think that is how Aldi is viewed in most markets, as a competitor to other discount stores rather than to conventional stores. I don't think it is considered a conventional supermarket competitor anywhere. Well, maybe by Wall Street Analysts...

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Re: Aldi fires $3.4 billion shot in US supermarket wars

Post by mbz321 » June 13th, 2017, 10:12 pm

storewanderer wrote:I think that is how Aldi is viewed in most markets, as a competitor to other discount stores rather than to conventional stores. I don't think it is considered a conventional supermarket competitor anywhere. Well, maybe by Wall Street Analysts...


All I know is from my observations, Aldi stores in my region (Northeast) are increasingly getting busier. I remember my local store that I frequently shop at was pretty much 'dead' for several years (I think it opened around 2010 or so), but business has grown quite significantly. Their product selection has gone from Dollar Tree and Walmart-type junky food to a much more broader selection of gourmet products, and it isn't uncommon to see 'nice cars' in the parking lot...they have definitely shaken their run-down 'poor people' image. I can do about 90% of my weekly shopping at Aldi...I could probably do all my shopping there really, but I'm a cheapskate and can do better on some items by buying loss leaders/ using coupons at the local ShopRite. Their produce offerings are still a weak point, but I've heard newer stores are finally adding refrigerated cases for certain items.

Maybe there is too much competition from ethnic grocers or farmers markets in Southern California to make it work, or more time is needed for them to catch on, but like it or not, the 'conventional supermarket' business model is dying a slow death.

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Re: Aldi fires $3.4 billion shot in US supermarket wars

Post by mbz321 » June 13th, 2017, 10:15 pm

mbz321 wrote:
storewanderer wrote:I think that is how Aldi is viewed in most markets, as a competitor to other discount stores rather than to conventional stores. I don't think it is considered a conventional supermarket competitor anywhere. Well, maybe by Wall Street Analysts...


All I know is from my observations, Aldi stores in my region (Northeast) are increasingly getting busier. I remember my local store that I frequently shop at was pretty much 'dead' for several years (I think it opened around 2010 or so), but business has grown quite significantly. Their product selection has gone from Dollar Tree and Walmart-type junky food to a much more broader selection of gourmet products, and it isn't uncommon to see 'nice cars' in the parking lot...they have definitely shaken their run-down 'poor people' image. I can do about 90% of my weekly shopping at Aldi...I could probably do all my shopping there really, but I'm a cheapskate and can do better on some items by buying loss leaders/ using coupons at the local ShopRite. Their produce offerings are still a weak point, but I've heard newer stores are finally adding refrigerated cases for certain items.

Maybe there is too much competition from ethnic grocers or farmers markets in Southern California to make it work, or more time is needed for them to catch on, but like it or not, the 'conventional supermarket' business model is dying a slow death. There are just too many other, and usually better options for groceries from Aldi to Costco and all the specialty markets and online competition in between, and we will see those businesses continue to grow when the Safeway's and Kroger's and Giant's out there simply just sort of 'exist'.
Last edited by mbz321 on June 14th, 2017, 9:12 am, edited 1 time in total.

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Re: Aldi fires $3.4 billion shot in US supermarket wars

Post by rwsandiego » June 13th, 2017, 10:45 pm

mbz321 wrote:
storewanderer wrote:I think that is how Aldi is viewed in most markets, as a competitor to other discount stores rather than to conventional stores. I don't think it is considered a conventional supermarket competitor anywhere. Well, maybe by Wall Street Analysts...


All I know is from my observations, Aldi stores in my region (Northeast) are increasingly getting busier. I remember my local store that I frequently shop at was pretty much 'dead' for several years (I think it opened around 2010 or so), but business has grown quite significantly. Their product selection has gone from Dollar Tree and Walmart-type junky food to a much more broader selection of gourmet products, and it isn't uncommon to see 'nice cars' in the parking lot...they have definitely shaken their run-down 'poor people' image. I can do about 90% of my weekly shopping at Aldi...I could probably do all my shopping there really, but I'm a cheapskate and can do better on some items by buying loss leaders/ using coupons at the local ShopRite. Their produce offerings are still a weak point, but I've heard newer stores are finally adding refrigerated cases for certain items....


Perhaps Far-Far Northwest Suburban Chicagoland (north of Elgin in the Algonquin/Lake-In-The-Hills/Huntley area) was a test market, as I observed this when I would take my dad shopping there in 2009 and 2010. The store layout was similar to the traditional Aldi and they carried many of the core canned goods and white bread (as does Whole Foods, to be honest, albeit at a higher price tag), but they also had a plethora of organic, "all-natural," and generally upscale products that one would find at a Trader Joe's.

mbz321 wrote:...Maybe there is too much competition from ethnic grocers or farmers markets in Southern California to make it work, or more time is needed for them to catch on, but like it or not, the 'conventional supermarket' business model is dying a slow death.

I'd say it is the competition from stores like Northgate Gonzalez and El Super than farmers' markets. Northgate Gonzalez and El Super are authentic Mexican grocers as are some of the smaller produce markets. They offer low prices. Sometimes, the quality is questionable but I think the typical Aldi/El Super/Northgate shopper is of the "cut the bad part off" mindset. Farmers' markets are expensive, plain and simple. I think another factor is a limited presence (38 stores in all of SoCal) and still another is a greater Trader Joe's presence. Honestly, if Aldi had locations in Phoenix I would shop there for some items. If memory serves, their frozen fish was certified as sustainably caught and they sold some nice fresh meats.

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