Aldi is moving to a better neighborhood.
Dan Gavin, a divisional vice president for the limited assortment grocery chain, told The Cincinnati Enquirer that changes in the marketplace have led the company to expand its real estate horizons.
"Early on, even 15 years ago, we were definitely in class B real estate market," Mr. Gavin told The Enquirer. "But in the past year we have moved our real estate to Class A sites. All types of incomes like to save money. And we want to be by our competition."
Today, Aldi has 12 stores in the Greater Cincinnati and Northern Kentucky area and the combination of low prices with high quality products is drawing consumers from across various demographic boundaries.
Martha Kidd, 69, is among Aldi's happy customers. She's especially happy since a new store in her area has cut down on the commute she used to make to shop at Aldi.
"We used to travel all the way to Middletown once a week to go to Aldi, and I'm glad I don't have to do that anymore," Ms. Kidd said. "Their prices are very, very good. And the quality is decent, too. I don't think there's anything I've bought there that isn't tasty."
According to Mr. Gavin, Aldi is scouting additional locations in the area as part of its steady national growth strategy. The grocer will open roughly 65 stores this year and another 100 next year.
While Aldi sticks to its limited assortment heritage, it has broadened its selection as new, more affluent consumers frequent the chain's stores. The company has expanded perishables, including moving into more fresh meat, and added wine in select locations.
Aldi has been successfully picking off pieces of business from both independents and grocery powerhouses such as Kroger and Wal-Mart.
"They are feeding off the Wal-Mart and Sam's Club shopper," Al Ferrara, a partner and retail expert for BDO Seidman, told The Enquirer. "For a no-frills customer and from a merchandising standpoint, finding the right real estate is the most important thing Aldi can do."
Discussion Question: Is there a competitive answer to Aldi? Does Aldi have the ability to make a significant move across demographic lines to bring in more affluent consumers? Does Aldi share some of the coolness factor of its cousin, Trader Joe's?