ALDI to add 70 new stores by next year

[retailfanmitchell019]

I've never bought more than a handfull of items from Aldi but there is a definite vibe to their stores.

I think they will do well in AZ. If for no other reason than the low prices and combined with a small store and quick in-out experience for the customer. Price seems to be very important in AZ. Those Frys Stores and Wal Marts are very crowded places down there.

Discount grocery stores have generally failed in AZ (Mega Foods, Food 4 Less) for some reason. Aldi is different though, and there are many Midwestern transplants in PHX who've been to Aldi before.

[storewanderer]

Discount grocery stores have generally failed in AZ (Mega Foods, Food 4 Less) for some reason. Aldi is different though, and there are many Midwestern transplants in PHX who've been to Aldi before.

Phoenix is a bit of an odd market. Ethnic formats also have not done nearly as well there as I would have expected them to.

Aldi is quite different than Mega Foods or F4L though given it is small format and those two were conventional-sized but warehouse format stores. There is just a lot of competition in Phoenix and historically Fry's has been very strong there at putting up a strong fight.

[arizonaguy]

Discount grocery stores have generally failed in AZ (Mega Foods, Food 4 Less) for some reason. Aldi is different though, and there are many Midwestern transplants in PHX who've been to Aldi before.

Phoenix is a bit of an odd market. Ethnic formats also have not done nearly as well there as I would have expected them to.

Aldi is quite different than Mega Foods or F4L though given it is small format and those two were conventional-sized but warehouse format stores. There is just a lot of competition in Phoenix and historically Fry's has been very strong there at putting up a strong fight.

Ever since Kroger bought Fred Meyer (and merged Fry's with Smith's and Smitty's) they've dominated the market (along with Walmart). A number of new players have tried to crack the market since then with not much success.

Tesco tried with Fresh and Easy and it was an abject failure although to be fair they tried to over expand and had stores (or shells of stores) pretty much everywhere and in some horrible locations.

Walmart felt threatened by Fresh and Easy and started its Marketside concept, which also failed.

WinCo entered the market with great expansion plans, purchased a lot of sites around the area, and then pretty much halted any plans of expansion after 7 stores. I know that they're not a small format grocer but they are a discount grocer and while they've developed a decent following they really didn't take customers away from Fry's / Walmart (but they did take customers from Albertsons / Safeway / Bashas')

Smart and Final expanded and then has shrunk to 5 stores in the market. They've closed multiple sites over the years and never really gained much penetration.

Sprouts has done well in the market (easily their largest) because a "discount" healthy focused store (focusing on perishables versus center store) is something that has been lacking.

Trader Joe's is probably the other exception to the rule. They have 12 stores in the Phoenix area and all of their stores here do extremely high volume.

The issue is why make an extra trip to Aldi if Fry's / Walmart can be one stop shops and if one is looking for decently priced, decent quality private label goods in a small format Trader Joe's is an available option?

In the Midwest, I get it. There are generally one or two higher priced conventional chains and Walmart as choices. Maybe a Sprout's and maybe a Whole Foods or Trader Joe's in a trendy neighborhood. Aldi serves a niche there.

In Phoenix, Aldi just isn't going after anything that already doesn't have an option which, IMHO, is better.

As far as Ethnic markets, it's because Phoenix never really developed any ethnic group that is really clustered into any specific part of town other than Latinos. There is Food City and the Ranch Markets (as well as El Super) to serve the Latino areas. A few Asian supermarkets have opened (Asiana Market, Lee Lee, H Mart) which are popular.

[storewanderer]

Ever since Kroger bought Fred Meyer (and merged Fry's with Smith's and Smitty's) they've dominated the market (along with Walmart). A number of new players have tried to crack the market since then with not much success.

WinCo entered the market with great expansion plans, purchased a lot of sites around the area, and then pretty much halted any plans of expansion after 7 stores. I know that they're not a small format grocer but they are a discount grocer and while they've developed a decent following they really didn't take customers away from Fry's / Walmart (but they did take customers from Albertsons / Safeway / Bashas')

Sprouts has done well in the market (easily their largest) because a "discount" healthy focused store (focusing on perishables versus center store) is something that has been lacking.

The issue is why make an extra trip to Aldi if Fry's / Walmart can be one stop shops and if one is looking for decently priced, decent quality private label goods in a small format Trader Joe's is an available option?

In the Midwest, I get it. There are generally one or two higher priced conventional chains and Walmart as choices. Maybe a Sprout's and maybe a Whole Foods or Trader Joe's in a trendy neighborhood. Aldi serves a niche there.

In Phoenix, Aldi just isn't going after anything that already doesn't have an option which, IMHO, is better.

I think you are on to something. Aldi has historically been in markets with fewer competitors. Phoenix may be too crowded for them to penetrate heavily but I am not sure if heavy penetration is the Aldi model. The thing is Aldi doesn't exactly go for a high market share. They just go for running those small stores with a few very well paid employees and a low cost structure and do a decent volume in a low cost model with limited operating hours.

Fry's historically has been very well handled. From the time Kroger made Fry's the dominant banner it has gotten good capex, multiple formats to keep stores open in neighborhoods Safeway/Albertsons didn't bother to price properly to compete in, and then in the past 5ish years when Kroger has really cut back on new store construction, at the tail end of that, Fry's opened a good number of brand new stores in growing areas around Phoenix. I am not sure the current Fry's is run the same as the Fry's of 5 years ago and certainly isn't run the same as the Fry's that was run by Jon Flora but it still seems to be a stronger than average competitor in the market and able to capture multiple market segments.

I think Aldi's place is for a small store, quick shopping experience for the basics, easy parking, for when you don't want to mess with the busy Wal Mart or Fry's parking lot.

[jamcool]

Except Aldi charges for carts and bags, which no other Phx grocery chain does

[veteran+]

Discount grocery stores have generally failed in AZ (Mega Foods, Food 4 Less) for some reason. Aldi is different though, and there are many Midwestern transplants in PHX who've been to Aldi before.

Phoenix is a bit of an odd market. Ethnic formats also have not done nearly as well there as I would have expected them to.

Aldi is quite different than Mega Foods or F4L though given it is small format and those two were conventional-sized but warehouse format stores. There is just a lot of competition in Phoenix and historically Fry's has been very strong there at putting up a strong fight.

Ever since Kroger bought Fred Meyer (and merged Fry's with Smith's and Smitty's) they've dominated the market (along with Walmart). A number of new players have tried to crack the market since then with not much success.

Tesco tried with Fresh and Easy and it was an abject failure although to be fair they tried to over expand and had stores (or shells of stores) pretty much everywhere and in some horrible locations.

Walmart felt threatened by Fresh and Easy and started its Marketside concept, which also failed.

WinCo entered the market with great expansion plans, purchased a lot of sites around the area, and then pretty much halted any plans of expansion after 7 stores. I know that they're not a small format grocer but they are a discount grocer and while they've developed a decent following they really didn't take customers away from Fry's / Walmart (but they did take customers from Albertsons / Safeway / Bashas')

Smart and Final expanded and then has shrunk to 5 stores in the market. They've closed multiple sites over the years and never really gained much penetration.

Sprouts has done well in the market (easily their largest) because a "discount" healthy focused store (focusing on perishables versus center store) is something that has been lacking.

Trader Joe's is probably the other exception to the rule. They have 12 stores in the Phoenix area and all of their stores here do extremely high volume.

The issue is why make an extra trip to Aldi if Fry's / Walmart can be one stop shops and if one is looking for decently priced, decent quality private label goods in a small format Trader Joe's is an available option?

In the Midwest, I get it. There are generally one or two higher priced conventional chains and Walmart as choices. Maybe a Sprout's and maybe a Whole Foods or Trader Joe's in a trendy neighborhood. Aldi serves a niche there.

In Phoenix, Aldi just isn't going after anything that already doesn't have an option which, IMHO, is better.

As far as Ethnic markets, it's because Phoenix never really developed any ethnic group that is really clustered into any specific part of town other than Latinos. There is Food City and the Ranch Markets (as well as El Super) to serve the Latino areas. A few Asian supermarkets have opened (Asiana Market, Lee Lee, H Mart) which are popular.

I agree, I could barely stand being a District Manager for Fresh & Easy much less shopping in such a store.

Aldi's and the like has never been my cup of tea. I just cannot rationalize getting in my car to perform another shopping trip to finish the chore (be it for specials or items not carried in the first store).

Though I do like Trader Joes............I am annoyed that I have to go two another store for things they do not carry. Plus, when I shop I do not want do other things in the store besides spending my money (like bagging, paying for carts, bringing boxes, etc.).

For me, one stop............get ALL that I need without having to "work" for it, spend a lot of money (decent pricing), get great service, fresh & quality foods.

[buckguy]

Aldi has done quite well in competitive marketplaces, like DC. They entered Cleveland when it had a large number of competitors including warehouse stores and Chicago when it had far more competitors than it has now. They aren’t interested in market share. They come in very quietly and they build out from a relatively small store base. They are now in all but the most affluent parts of greater DC and still have a lot of potential areas to enter. In some locations, they have little competition, in others they have everyone in the marketplace in relatively close distance. The last time I was in one of their stores was in Columbia, MD which has plenty of everything and they were quite busy. Like their not quite sibling, Trader Joe’s, they know their niche and don’t really care about being the market leader.

The supermarket business has been evolving into a much more niche defined business in the last 20 years. Southern California is a good example——I spent several months in LA during the mid 2000s and it was such a contrast with Atlanta, where I lived at the time. The LA area had numerous different kinds of places to buy food—it wasn’t just a matter of big chains like Ralph’s and Vons. Atlanta had been dominated by Kroger in all its mediocrity and other than Publix and Whole Foods, most of the competition had fallen away or was in the process of doing so. Now, even Atlanta has more niche players, partly because of the growth of immigrant populations.

[mjhale]

I'm pleasantly surprised at how well Aldi has done in the DC area. I never would have thought that I would see Aldi stores popping up in the more affluent sections of town. We had no Aldi stores in MD where I grew up. When I moved to VA the only Aldi stores were in poorer areas and in the off-off shopping centers. I remember going to an Aldi in the late 2000s after hearing a colleague rave about them. It was a total dump with brands I never heard of. That Aldi made the old Alexandria, VA Shoppers when it was in the old Lincolnia marina Safeway look like a nice place. I went back to Aldi after they started to open stores in the periphery of the Virginia suburbs in better parts of the area. The stores were much nicer and the prices couldn't be beat. Between the nicer stores, better locations and the following that Aldi seems to have built they will be just fine around here. As has been mentioned in this thread they aren't looking for market share in the truest sense. But what they have done is to give people a real option to get good quality stuff at a very competitive price. As Aldi has increased its presence around me I have noticed a increase in quality of store brand items and much more aggressive pricing on them.

What will be interesting is how Aldi will respond to Lidl. Lidl now has several stores near me and has I believe five or six more in development between new builds and buying the leases of old Shoppers locations. I like Lidl very much and shop there quite a bit. For me Lidl is like Aldi but in a nicer, more upscale environment. Lidl has a bit more broad of a selection and puts in a few name brands here and there to make it interesting. I think the core offerings in Lidl are very similar to what Aldi has. Where Aldi really excels over Lidl is with the special buys both food and especially non-food. There are many Aldi special buys that are sought after (see the holiday Advent Calendars). Once Aldi has you in the store and hooked on what special buy comes next they can get you into buying other stuff from them. Lidl's special buys tend to be pretty weak and not something I'd go there just for them.

[storewanderer]

I like Lidl very much and shop there quite a bit. For me Lidl is like Aldi but in a nicer, more upscale environment. Lidl has a bit more broad of a selection and puts in a few name brands here and there to make it interesting. I think the core offerings in Lidl are very similar to what Aldi has. Where Aldi really excels over Lidl is with the special buys both food and especially non-food. There are many Aldi special buys that are sought after (see the holiday Advent Calendars). Once Aldi has you in the store and hooked on what special buy comes next they can get you into buying other stuff from them. Lidl's special buys tend to be pretty weak and not something I'd go there just for them.

Lidl has another good hook: the extensive bakery operation in the store; that will bring customers in, and often.

I agree I liked Lidl a lot better than Aldi... as a tourist buying snacks Lidl had far more to offer, and physically it just was a nicer store. But ultimately product mix and quality would dictate my preference if both were readily available closer to home.

[mbz321]

Lidl's special buys tend to be pretty weak and not something I'd go there just for them.

I would say just the opposite. I don't live around the corner from my nearest Lidl so I'm not there frequently, but their 'special buys' are much more extensive than Aldi (they are also quick to reduce the price of slow-moving items, while with Aldi, it seems to be a rarity). I honestly wish there was one closer as their selection of almost everything is a lot better (except for frozen veggies for some reason...on a Lidl trip earlier this week all they had was their brand green beans and a couple Green Giant varieties with sauce in the package), and prices on many of the things are even less than Aldi. Plus they have self-checkouts.