It’s great news for the consumer, but less-than-great news for the nation’s supermarket chains, notably Kroger, Walmart, and even high-end organic stores like Whole Foods. A German-based discount food retailer, Aldi, is planning to take over the U.S. with 45 new stores by the end of 2016. Aldi is known for its very low prices, which are supposedly even more affordable than Walmart, and their invasion of the nation’s grocery industry is likely to change its landscape.
American grocery stores have a lot to be afraid of. When Aldi began opening its doors in the UK several years ago, its presence did significant damage to the profits of already-existent stores. Even the UK’s largest supermarkets fell “into a crippling price war that has dented profits, triggered layoffs, and sent the companies’ share prices tumbling,” says Business Insider.
Though Aldi already operates a handful of stores across the U.S., its planned expansion poses a serious threat to other stores. Andy Clarke, CEO of Asda, the U.K.’s second-largest grocery chain, refers to the very competitive environment sponsored by Aldi’s prices “the worst storm in retail history.”
Though the European store’s presence might send established food retailers scrambling, the news of Aldi’s expansion is probably very good for the average American. Their discount prices are incredibly tempting, and the stores’ easy-to-navigate layout supports quick and simple shopping.
But Aldi isn’t the only threat to American stores: another European-based chain, Lidl, which already operates close to 1,300 stores around the nation, recently announced that it would also expand its reach.
“We plan to build on the foundation that has made Lidl so successful in Europe, while creating a unique experience for American consumers that will be unlike anything else in the market,” says Brendan Proctor, the Chief Executive Officer for Lidl U.S. The company already operates close to 10,000 stores across Europe.
Aldi and Lidl supposedly keep their prices, which are roughly 22% lower even than Walmart’s, by keeping to a small selection of private-label items. Many of the goods they carry are unlikely to be found anywhere else in the U.S. grocery market. Shoppers should bring their own bags and pay 25- cents to use a grocery cart, money that’s returned when the cart is so the stores don’t have to pay employees to round up errant carts. It all seems pretty promising for consumers, and we’ll know more once the stores begin opening their doors.