Aldi US will open 8 stores at once on 24 March, all in the southern part of California. Aldi Süd‘s division will go head to head with Trader Joe’s in that area, Aldi Nord‘s American subsidiary which has a strong presence in that part of the country.
Aldi wants to reach entire US
The surge of store openings is part of Aldi’s plan to open 45 stores in southern California by the end of the year. All this is part of Aldi’s ambitious plan from back in 2013, with a goal of 650 stores in a 5-year timeframe.
This strategic 5-year plan was designed to create a presence all across the United States in 2018. With some 2,000 stores, Aldi US aims to cater to 45 million customers per month, up from 1,500 stores and 30 million American customers at this point.
Lidl follows Aldi to the US
The American discount branch is a very lively market, because there is no clear hard discounter aside from Aldi at this point. Save-A-Lot and Dollar General come closest in a general sense, but Aldi US has a clear playing field as a “nationwide” food discounter, until Lidl decides to move across the Atlantic at least.
Lidl’s American ambitions were revealed in 2013, but its planned 2015 arrival failed to materialize. It may even take up to 2018 before the chain actually arrives on American shores, but by that time Aldi US will have completed its strategic plan and will be ready to parry its enternal rival’s move in the United States.
“In the years following the recession (2008), Aldi US focused a lot on expansion”, McMillan Doolittle’s retail analyst Neil Stern said. “The company had a huge growth in the United States, well before Lidl’s plans were revealed.”
Trader Joe’s: competitor from within its own ranks
At this moment in time, Aldi US’s main competitor comes from its own ranks. Its rapid Californian expansion puts Aldi Süd’s subsidiary, Aldi US, in the path of Aldi Nord’s American subsidiary, Trader Joe’s. “Interestingly one of its major competitors will be Trader Joe’s which operates small format stores with a strong value for money proposition”, a British IGD analyst said. “California is Trader Joe’s heartland and operates from a position of strength.”
Trader Joe’s will definitely not have missed Aldi US’ growth, all the more now that it has entered markets Trader Joe’s launched in and where it has a strong position. Even its headquarters are located in this region.
Stern does not believe it will be a full frontal confrontation between both groups. “Aldi and Trader Joe’s have competed in several markets for a long time. They are actually neighbours here in Chicago! So, they do compete with each other, but target a different consumer audience. Aldi is for the average income, while Trader Joe’s is for the higher educated customer, often with more money to spend.”
