Is a new store concept the start of something big(ger) for Aldi?
Over the past few years, small format store concepts have allowed some of the nation’s biggest retail chains to successfully establish a footprint in urban environments where a traditional big box would not fit. One of the nation’s fastest-growing discount grocers, however, has recently decided to go bigger.
Aldi plans to open a 25,000-square-foot store in Philadelphia in November, according to BillyPenn. The store, which will take up the ground floor of a 14-story mixed-use tower, will have a fresh food section 40 percent larger than what is found in other Aldi locations.
Aldi stores are typically 16,400 square-feet with 10,000 square feet of selling floor, according to the Aldi corporate website. The chain touts its “modest store size” as one of the reasons it is welcomed by communities.
Aldi has also experimented with smaller concepts similar to those that have brought so much success to other retailers, such as Target.
In March of last year, Aldi began piloting a store concept in London called Aldi Local. The Aldi Local store has no parking lot, is only 6,400-square-feet and stocks roughly 300 products compared to a conventional Aldi unit’s 1,800 SKUs. There have thus far been no announcements about plans for Aldi to expand the smaller store format.
A 1,000-person survey in the U.K. performed by Lumina Intelligence, however, found that 53 percent of shoppers polled would like to see small concept Aldi stores placed in other busy areas and shopping districts.
In addition to the new large concept Philadelphia Aldi store, the multi-use building will feature 475 apartments and a preschool, BillyPenn reports.
The German budget grocer has been a top performer throughout the novel coronavirus pandemic and continued on pace with its planned expansion into the U.S. In mid-July, it announced that it would be opening 70 stores this year and entering the Arizona market for the first time. In 2017 Aldi announced plans to become the third-largest U.S. grocer, behind Walmart and Kroger, by 2022, and recently surpassed a store count of 2,000.
- Aldi on North Broad will open in November, as Philly’s supermarket scene revs up – Billy Penn
- The Aldi Difference – Quality Stores, Quality Products – Aldi
- Will anything slow Aldi and Dollar General’s roll if Covid-19 didn’t? – RetailWire
- Aldi tests smaller urban concept store – RetailWire
- Aldi Local: 6 Stats Highlighting the Potential Impact on UK Convenience – Lumina Intelligence
DISCUSSION QUESTIONS: Do you think Aldi will be successful with a bigger box concept that includes 40 percent more space for fresh food? Would you expect the economics around operating larger boxes to have any effect on Aldi’s pricing or other elements of its business at those locations?