Aldi is ramping up its US expansion as the discounter looks to capitalise on shoppers’ frustration over rising food bills.
The German grocer is opening a new US store every few days as part of a $9bn expansion plan, with its latest site launching this week on Manhattan’s 42nd Street.
Aldi, which has spent five decades building its presence in the US, is now targeting 3,200 stores by 2028 and believes there could be room for more than 4,000 locations across the country.
Aldi USA chief commercial officer Scott Patton told the Financial Times: “We don’t know what the ceiling is. We’re trying to take market share from anyone who sells groceries.”
The retailer’s US store estate is expected to overtake Kroger, the country’s largest supermarket chain, within months.
Aldi has been one of the biggest beneficiaries of consumers trading down amid persistent food inflation, mirroring the role it has played in Europe and the UK, where it has piled pressure on traditional supermarket margins.
Patton said food inflation had created “an opportunity for consumers to rethink where they shop”.
Morgan Stanley data showed Aldi was taking market share at a pace comparable with Walmart, Sam’s Club and Costco. The bank found that when Aldi opened a store, it cut annual sales from competitors within a 10-mile radius by an average of one percentage point.
The discounter currently accounts for around four per cent of US grocery spending, according to consultancy Kearney, compared with 10.8 per cent in the UK.
However, Morgan Stanley estimates Aldi’s US revenue reached $30bn last year and is growing at a double-digit rate despite sluggish food sales across the wider market.
Aldi’s low-cost model is built around compact stores, limited ranges and a heavy reliance on own-label products, which make up almost 90 per cent of its range.
Its US shops stock around 2,000 product lines, compared with roughly 120,000 at Walmart’s larger-format stores.
The grocer is also continuing to place stores near major rivals, including Walmart, as it seeks to pull shoppers away from established supermarket chains.
Dan Gavin, Aldi USA vice-president of national real estate, said the retailer was prepared to open sites directly in front of competitors.
“We’ll go right out in front of them,” he said. “We’ll catch their crumbs all day.”
Aldi’s rapid growth comes as traditional US grocers come under pressure from value-led rivals. Walmart accounts for around a fifth of US grocery sales, while Aldi, Costco, Sam’s Club, Trader Joe’s and Amazon have all continued to gain ground.
The retailer is planning 50 stores in Colorado and is also expanding in Arizona and Florida.
However, analysts warned Aldi may not be able to capture the same level of market share in the US as it has in Europe, with American shoppers more attached to one-stop shopping and broader ranges.
Patton said Aldi was not trying to become a full-service supermarket.
“We’re not going to be a one-stop shop,” he said. “Come here first, get 80 to 90 per cent of what you need, top it off somewhere else.”
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