USA: Aldi prepares to open extra-large store in Philadelphia

Discount Retail Chain Aldi (privately owned) decision to place a supermarket within a residential project reflects a trend among real estate developers in recent years to include food retailers within mixed-use projects with residential components. The fact that the new store will be among the German chain’s largest locations only underscores the importance grocers and neighborhood planners are placing on offering people the convenience of having a full-fledged supermarket just steps from where they live.

Apartment-dwellers have shown a willingness to pay extra to be able to walk from their homes to a food retailer. According to a study by RCLCO Real Estate Advisors, apartment buildings that contain a Whole Foods or Trader Joe’s bring in a 5.8% rental premium compared with other multifamily communities located close by. Although including a grocery store in a building can bring added construction costs, the developers have calculated that the extra rent they can collect by offering such an amenity to tenants is likely to compensate for the higher initial expenses.

Other examples of grocery stores within developments with substantial residential space that have opened recently include a Giant Food supermarket in Fairfax, Virginia and a Safeway in the Capitol Hill neighborhood of Washington, D.C.

According to WHYY, the extra-large Aldi coming to Pennsylvania’s largest city will feature six aisles and a fresh section that is 40% bigger than a typical Aldi location, which averages 16,400 square feet (5,000m2). The median size of a U.S. supermarket was 41,651 square feet (12,600m2) in 2018, statistics compiled by the Food Industry Association show.

Aldi plans to open another 25,000-square-foot store (7,600m2) in the Washington, D.C., area in 2022. It has also built discount stores abroad that are as large as 6,000 square feet (1,850m2), underscoring the company's focus on flexibility.

The new supermarket continues a string of new stores that in recent years have come to or been planned for Philadelphia, where the radio station said 56 grocery stores opened between 2015 and 2018. Amazon plans to open a grocery store in another new residential project located only about a mile from the new Aldi, according to the Philadelphia Business Journal. Lidl is also working on a new Philadelphia location, which was supposed to open in late 2020 but has been delayed to next year, WHYY reported.

Aldi has been on a tear in the United States and now operates more than 2,000 stores across the country. The company’s new store in Philadelphia is among more than 70 U.S. stores the retailer intends to inaugurate in 2020.

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