ALDI to add 70 new stores by next year

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Re: ALDI to add 70 new stores by next year

Post by jamcool »

I’ve always wondered why Aldi never goes into smaller towns, they would probably do very well as an alternative to DG and Walmart
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Re: ALDI to add 70 new stores by next year

Post by storewanderer »

jamcool wrote: May 27th, 2023, 10:30 am I’ve always wondered why Aldi never goes into smaller towns, they would probably do very well as an alternative to DG and Walmart
Throughout the middle of the US, there are some towns that just have a Wal Mart Supercenter and Aldi. Maybe a really bad independent grocer hanging on somewhere in there with a facility smaller than an Aldi.

Why isn't Aldi focusing on smaller towns for its current expansion in the western US? I think it is a volume thing. They want the high volumes of the densely populated areas.

Grocery Outlet in CA has focused on a lot of smaller towns for expansion in recent years and has taken some spots that would have been great Aldi locations. I suppose Aldi could still open in those towns. Not all of these Grocery Outlets in the small towns are doing well either. I'm not sure they will all survive.
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Re: ALDI to add 70 new stores by next year

Post by Romr123 »

Exactly this---they need to quickly build volume to support DC expansion. Once they have stable volumes, they can in-fill with smaller-town stores.
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Re: ALDI to add 70 new stores by next year

Post by storewanderer »

And I will add- this is a major threat to Safeway in the Western US, especially with how Safeway sets its pricing.

An Aldi opening up in small town A and taking $80k a week of volume from Safeway that already underperforms due to too high of pricing/people shopping out of town whenever they possibly can, is not going to end well for Safeway.

There is a reason why a number of those small towns in the middle of the US no longer have a conventional grocer anymore...
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Re: ALDI to add 70 new stores by next year

Post by BillyGr »

jamcool wrote: May 27th, 2023, 10:30 am I’ve always wondered why Aldi never goes into smaller towns, they would probably do very well as an alternative to DG and Walmart
There is one example that pops to mind in northern NY - Saranac Lake.

There is an Aldi there, though they also have a Tops/Grand Union (had two, which may have been under either name when they first opened, then one closed - forget if that was one that switched back to GU when the parent companies of Tops/PC started working together or not).

Seems a bit unusual for an otherwise smaller town, though it may be that, between those two grocery options there, Price Chopper and Hannaford in Lake Placid (about 8 miles away), and both towns having (or having had) Rite Aid/Walgreens converts and Kinney (a smaller pharmacy chain in that part of NYS and into VT), that the overall area gets more customers than would be expected, as many of the other smaller towns around that area have no stores at all (or maybe a Stewart's convenience store).
Thus, for that part of the state, it is really a more major market than the size of the two towns themselves would suggest.
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Re: ALDI to add 70 new stores by next year

Post by jamcool »

storewanderer wrote: May 27th, 2023, 10:57 am And I will add- this is a major threat to Safeway in the Western US, especially with how Safeway sets its pricing.

An Aldi opening up in small town A and taking $80k a week of volume from Safeway that already underperforms due to too high of pricing/people shopping out of town whenever they possibly can, is not going to end well for Safeway.

There is a reason why a number of those small towns in the middle of the US no longer have a conventional grocer anymore...
Except a Safeway will have a full service meat department bakery and deli and more name brand items (no one desires Aldi Cola or whatever it is).
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Re: ALDI to add 70 new stores by next year

Post by storewanderer »

jamcool wrote: May 28th, 2023, 11:39 am
storewanderer wrote: May 27th, 2023, 10:57 am And I will add- this is a major threat to Safeway in the Western US, especially with how Safeway sets its pricing.

An Aldi opening up in small town A and taking $80k a week of volume from Safeway that already underperforms due to too high of pricing/people shopping out of town whenever they possibly can, is not going to end well for Safeway.

There is a reason why a number of those small towns in the middle of the US no longer have a conventional grocer anymore...
Except a Safeway will have a full service meat department bakery and deli and more name brand items (no one desires Aldi Cola or whatever it is).
Despite efforts over the years to add departments, there are still various of the smaller rural Safeway units that are missing a bakery and/or missing a deli. Some of these have prepackaged/defrosted items and from time to time may get driven bakery/deli items from other stores for sales, etc.
Right off the top of my head- Safeway units in rural areas with no bakery I can think of:
No bakery: Quincy, CA; Burney, CA; Tahoe City, CA; Hawthorne, NV; Lovelock, NV; Lakeview, OR; Gridley, CA; Burns, OR; Grass Valley, CA (Downtown)
No deli: Hawthorne, NV; Lovelock, NV; Lakeview, OR; Grass Valley, CA (Downtown)
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Re: ALDI to add 70 new stores by next year

Post by HCal »

jamcool wrote: May 28th, 2023, 11:39 am Except a Safeway will have a full service meat department bakery and deli and more name brand items (no one desires Aldi Cola or whatever it is).
Well, I have a bottle of "Summit" Cola in my fridge right now :roll: But Aldi sells 2 L Coke too, it's one of their few name brand products.

Aldi doesn't need to match Safeway exactly in order to siphon off sales. Rural customers are likely to be more price sensitive, and will gladly go to Aldi to get what they can, and then go to Safeway for the rest. For a store that was already just borderline profitable, that could be enough to push them over the edge.

Although with that said, I've started to see some price increases at Aldi. Vons is often very close in price if you use a 4U deal.
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Re: ALDI to add 70 new stores by next year

Post by buckguy »

BillyGr wrote: May 27th, 2023, 6:06 pm
jamcool wrote: May 27th, 2023, 10:30 am I’ve always wondered why Aldi never goes into smaller towns, they would probably do very well as an alternative to DG and Walmart
There is one example that pops to mind in northern NY - Saranac Lake.

There is an Aldi there, though they also have a Tops/Grand Union (had two, which may have been under either name when they first opened, then one closed - forget if that was one that switched back to GU when the parent companies of Tops/PC started working together or not).

Seems a bit unusual for an otherwise smaller town, though it may be that, between those two grocery options there, Price Chopper and Hannaford in Lake Placid (about 8 miles away), and both towns having (or having had) Rite Aid/Walgreens converts and Kinney (a smaller pharmacy chain in that part of NYS and into VT), that the overall area gets more customers than would be expected, as many of the other smaller towns around that area have no stores at all (or maybe a Stewart's convenience store).
Thus, for that part of the state, it is really a more major market than the size of the two towns themselves would suggest.
They got their start in small town Iowa, so they have a history in fairly rural areas. Probably depends on their distribution---some of their DCs are away from large metros----Saranac is probably the frontier for one of these. That one is located to primarily cover Central and Western NY but also includes the North Country. Its territory includes number of small markets that are far afield, like Watertown and Oswego which enables going even further to places like Saranac or Malone, further North. There's probably just enough density of smaller markets to enable this and probably also a lack of Sav-aLots.
Last edited by buckguy on May 30th, 2023, 11:53 am, edited 1 time in total.
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Re: ALDI to add 70 new stores by next year

Post by BillyGr »

HCal wrote: May 30th, 2023, 1:10 am
jamcool wrote: May 28th, 2023, 11:39 am Except a Safeway will have a full service meat department bakery and deli and more name brand items (no one desires Aldi Cola or whatever it is).
Well, I have a bottle of "Summit" Cola in my fridge right now :roll: But Aldi sells 2 L Coke too, it's one of their few name brand products.

Aldi doesn't need to match Safeway exactly in order to siphon off sales. Rural customers are likely to be more price sensitive, and will gladly go to Aldi to get what they can, and then go to Safeway for the rest. For a store that was already just borderline profitable, that could be enough to push them over the edge.

Although with that said, I've started to see some price increases at Aldi. Vons is often very close in price if you use a 4U deal.
I was going to say I thought I had seen Coke in one locally last time I was in there (not really looking for it, but it kind of popped out amongst the mostly store branded items).
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