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Aldi: Small Stores and Big Growth

Written by George Anderson

By George Anderson

The stores are small, typically, not much bigger than a convenience store. The selection of foods and some non-foods is limited, mostly private label, but the prices are enough to make some shoppers ask, "Wal-Mart, who?"

Kristen Torres, 22, told the Hartford Courant that she and husband Vinny, 24, do most of their basic grocery shopping at the Aldi in Wallingford, Conn. The reason is simple, she said, "You pay half the price. I love the fact that milk is always $1.99 a gallon."

Aldi is far from a household name in the U.S. The company has stores in 26 states and is just getting started in a few of those. Recently, it announced plans to build a 500,000 square-foot distribution center in South Windsor, Connecticut to supply 70 new stores planned for Connecticut, Rhode Island and Massachusetts.

Bruce Persohn, vice president of Aldi's northeastern division, said it is looking to break ground on the warehouse this spring and complete it by the fall of 2008.

Neil Stern, a senior partner with McMillan/Doolittle, said, "They're a very different retail company. They own all their own stores. They don't take on any debt. Aldi builds stores only as fast as their profits allow - they don't add any more stores than the cash allows."

Discussion Questions: Will Aldi become popular with all types of consumers in the U.S. as it has in Germany? Do you see Aldi changing, in terms of products sold, merchandising, etc. as it gains more market penetration in the U.S.?

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