For much of its U.S. existence, little attention was paid to Aldi and its steep discounts on the everyday grocery essentials. As shoppers caught on, especially during rough economic times, the little discount grocery chain from Germany that was once seen as harmless by competitors became the new target to beat. Even Aldi’s rival from Germany, Lidl, is jumping into the ring with its first 100 stores planned to rollout over the next year, and even more already underway. This increased competition isn’t going unnoticed though, and despite sales increasing steadily, Aldi is about to make moves to show that they’re committed to beating out the competition.
A $1.6 billion remodeling effort is currently planned or underway for 1,300 of its 1,600 U.S. locations to not only update the look of its stores but to also accommodate an increased portfolio of products expected to start rolling out soon. “We are re-merchandising, remodelling, enhancing our product range and are focused on gaining volume so more customers start their shopping at Aldi and we are able to complete their shopping lists more so than we have in the past,” Chief Executive Jason Hart stated.
Aldi is still a small player in terms of market share, capturing only 1.5 percent of the U.S. grocery market versus Walmart’s current estimate of 22 percent, and while it still manages to pose a threat to these bigger players, some analysts believe that this popularity and competitive nature is going to also shake up the smaller chains, forcing them to shut their doors for good. “Given Aldi’s expansion, Lidl’s entry, Wal-Mart’s response and Amazon’s growing ambitions in this space,” Strategic Resource Group’s Burt Flicking said, “it is fair to expect a significant acceleration in the bankruptcy and liquidation cycle in this sector over the next few years.”