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Julie Creswell


NextImg:Aldi’s Passionate, Cultlike Following Fuels Its Rapid Expansion Plans

On most Mondays, Brisania Ortiz pushes a cart into an Aldi grocery store near her home in Frisco, Texas, and begins shopping for the week.

She picks up organic fruits and vegetables, then sustainably raised eggs and grass-fed ground beef. She adds milk, boxes of cereal and bags of chips — all made without artificial dyes — for her three children. She’s in and out of the store in about 20 minutes and able to feed her family of five for $100.

“The prices. I can’t comprehend how low the prices are for the quality, organic foods that they sell,” Mrs. Ortiz said. “It feels like I’m at a bougie store, but I’m not paying bougie prices.”

In the current grocery store battle, where chains are going head to head for a piece of consumers’ shrinking wallets, Aldi, known as a discount supermarket, is coming out swinging.

Aldi, which originated in Europe, is rapidly expanding its footprint in the United States. This year, it plans to open 200 stores across the country, more than any other grocer, and expects to have around 2,600 locations by the end of the year, making it the third-largest supermarket chain by number of stores. Kroger has 2,700 under various names, and Walmart has 5,206 locations. Aldi expects to have more than 3,200 stores in the United States by the end of 2028.

Customers are flocking to Aldi. Overall, visits to grocery stores in the first half of this year were up about 1.8 percent from last year, but customer trips to Aldi stores surged more than 7 percent, according to Placer.ai, which tracks foot traffic at retailers and restaurants.

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Customers lined up early to be among the first to enter the Aldi store in Westlake. The chain plans to open 200 stores across the country this year.Credit...Scott McIntyre for The New York Times
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Shoppers wearing Aldi gift cards while waiting in line at the Westlake store. Customer trips to Aldi stores surged more than 7 percent in the first half of this year.Credit...Scott McIntyre for The New York Times

Aldi’s growth is being attributed to the fact that it has tapped into two trends driving American shoppers: discount prices and healthy products.

About 90 percent of what Aldi sells are its own, private-label brands. Therefore, its spaghetti sauce, cereals and frozen pizzas are less expensive than big-name brands, a draw for consumers increasingly careful with how they spend their dollars.

Aldi has also leaned into consumers’ healthy eating preferences, offering organic fruits and vegetables, as well as its own versions of snack bars, pancakes and foods with added protein. Its private-label cereals and chips are made without artificial dyes.

“We’re growing because we’re offering customers food that is good for them and doesn’t have unnecessary additives and food dyes,” said Dave Rinaldo, the chief operating officer of Aldi U.S., noting that the chain stopped using artificial colors in 2015.

And while food prices continue to rise, privately held Aldi recently cut prices on 400 of the roughly 2,000 items it sells in its stores, Mr. Rinaldo said.

“Americans are strapped for time, and, after years of inflation, their wallets are pinched,” he said. “We’re in a moment where the demand has come to where we literally can’t open the stores fast enough.”

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Aldi is part of a wave of smaller grocery store chains that have links to Germany and are rapidly expanding in the United States.Credit...Scott McIntyre for The New York Times

The grocery store landscape in the United States is bifurcated. Over the last four years, discount chains like Aldi and others have rapidly expanded, opening a total of 576 new stores, according to an analysis by Coresight Research, a retail research firm.

Aldi is part of a wave of smaller grocery store chains, including Trader Joe’s and Lidl, that have links to Germany and are rapidly expanding in the United States. In Germany, family-owned Aldi was split up by two brothers into two separate companies, Aldi Süd and Aldi Nord, after a disagreement in the 1960s. Aldi Süd began opening Aldi stores in the United States in the 1970s while Aldi Nord acquired Trader Joe’s in 1979. Aldi Sud operates supermarkets in Germany, Hungary and Britain.

In the United States, about half of the stores that Aldi will open this year are conversions of its 2023 acquisitions of some Winn Dixie and Harvey Supermarket grocers.

In an effort to retain price-sensitive customers, traditional grocery store chains have increased their own offerings of private-label brands. In June, sales of Kroger’s private-label foods outpaced national brands for the seventh consecutive quarter, the supermarket’s chief executive said on an earnings call. He said Kroger planned to introduce 80 new products containing protein to its lineup to meet changing consumer preferences.

But the traditional stores can’t quite duplicate the passionate fan club that discounters like Trader Joe’s and Aldi have on social media. On Facebook, the group Aldi Aisle of Shame Community, named for the store’s middle aisle that features odd weekly finds like pool lounges, academic planners and rice cookers, has 3.6 million members. There, members share their grocery hauls, ask which Aldi butter is best (many votes for the Irish) and trade recipes or meal hacks (Aldi sour cherry fruit spread on a grilled cheese sandwich?).

After gushing about Aldi’s jasmine rice, avocado oil and sourdough bread, Bailey Hayes, a 26-year-old social-media content creator from League City, Texas, laughed when asked if it was typical for people to rave about a grocery store.

“My family makes fun of me for how much I love Aldi,” she said. “But, especially in today’s world, when groceries are so expensive, I can walk in and spend half the amount that I would somewhere else and still find really healthy food items that fit my lifestyle.”

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About 90 percent of what Aldi sells is its own private-label brands.Credit...Scott McIntyre for The New York Times
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Customers are flocking to Aldi, in part because of the chain’s discount prices and healthy products.Credit...Scott McIntyre for The New York Times

What makes that level of enthusiasm especially surprising is that what Aldi provides is a stripped-down, almost utilitarian, model of a supermarket.

At Aldi stores, shoppers need to pay a quarter to unlock the chain to obtain a shopping cart. (They get the quarter back when they return the cart.) There’s no deli counter, bakery or pharmacy. The stores are small, a half or even one-third of the size of a Kroger or Walmart. There is no quirky signage or bell-ringing, like at Trader Joe’s.

Rather than have employees spend time arranging items on shelves, salad mixes, jars of olives and boxes of crackers are placed on large racks in the stores in the large cardboard boxes they were shipped in.

And many shoppers go to Aldi for its so-called dupes of more expensive, big-brand foods and beverages. At an Aldi in Rockaway, N.J., 12.2-ounce boxes of Fruit Rounds, each priced at $1.68 and featuring a large green parrot with a red round loop of cereal in its mouth, sit next to 16.6-ounce family-size boxes of Froot Loops with the character Toucan Sam on the front, marked at $4.48.

A couple of aisles over, Aldi had cans of its Popz Prebiotic soda in flavors like strawberry lemon and raspberry rose for $1.49 on a shelf next to cans of Poppi Prebiotic soda in flavors like strawberry lemon and raspberry rose for $1.99. Poppi was acquired this year by PepsiCo for nearly $2 billion.

Some big brands are not exactly flattered by the attempts at imitation. This summer, Mondelez International sued Aldi, claiming its private-label cookie line “blatantly copies” the packaging of popular signature snacks like Oreos and Chips Ahoy! A spokeswoman for Aldi said the company would not comment on pending litigation.

Still, grocery store analysts say it is the pared-down, small-store format used by Aldi that is growing in popularity.

“When a consumer walks into a traditional store, it’s overwhelming,” said Phil Lempert, a food industry analyst and the editor of supermarketguru.com. “They may have a shopping list of 20 products, but they have to walk past 40,000 products first.”

Aldi has reduced its store footprint as well as the number of items it offers. “Now, instead of 100 bottles of olive oil, you have maybe four choices, including one that’s organic and one that’s imported from Italy,” Mr. Lempert said. “That’s a better shopping experience for a lot of consumers.”