German discounter Aldi has created a real estate company to prepare for its Italian conquest, starting with its first store in Trento.
Trailing Lidl and Eurospin
Despite a presence in more than fifteen countries across three continents with a store network of more than 10,000 stores, Aldi is not present in Italy, one of Europe’s largest economies. It now looks to remedy that situation with a real estate company that will manage all of its local stores, after it had already announced it would come to Italy back in 2015.
Aldi Immobiliare, based in Bolzano, will take charge of every Italian Aldi store, whether they were at a purchased or rented location. The very first store should open in Trento and the company has put aside 200 million euro to open new stores and to operate its distribution center in Verona.
The Italian expansion will be a challenge, because competitors like Lidl (with more than 600 stores), Eurospin and Md are already occupying the Italian discount market. On top of that, Italian consumption indexes dropped for 2016, making it even harder to penetrate the market. Nevertheless, Aldi has targeted towns with at least 30,000 inhabitants as prime locations, leading to a store network potential of about 520 stores.
Despite difficult market conditions, Aldi has done extremely well in the United Kingdom and will spend another 300 million in that market, while it has also just launched a Chinese web shop in an attempt to gain a foothold in that enormous market.