USA: Aldi expands in the USA

Discount Retail Chain Aldi USA continues to capture the attention of American customers. It's not every day that New Yorkers queue up at dawn to get their hands on the latest German products. But that's exactly what happened on a November morning in downtown Brooklyn.

Adrianne Murray and her two daughters waited on the sidewalk at 6:06 a.m., hoping to be among the first 100 people allowed to enter America's newest Aldi supermarket. The Murrays were happy to visit another location of their favourite supermarket and doubly so because they had the chance to get hold of a reusable Aldi carrier bag, filled with free products and a voucher that was supposed to make the already cheap goods even cheaper.

While Aldi is struggling to keep up the pace in Europe, in a market that has been trimmed to discount for decades and in which competitor Lidl has established itself as a champion of low-cost food, the chain is attracting increasing interest in the USA and is continuing to expand its store network.

The Murrays, for example, had to travel to New Jersey for years to shop at Aldi. Once, Adrianne said, she bought a pair of "very chic" turquoise automatic salt and pepper mills, a typical spontaneous purchase that many die-hard Aldi fans proudly report online.

A cross-section of the Brooklyn population stretched over several blocks: a hipster in Birkenstocks, a school janitor, health care workers, people with state food aid. Software developer Roy Iacob stood in line with his wife and two friends, all in self-designed Aldi shirts.

In Europe, Aldi is struggling to keep up with rivals like Lidl. Instead, the discounter is betting on the USA and is expanding strongly there.

The rush to the opening was all the more remarkable in view of the competition within walking distance, including even a Lidl store. While other supermarkets are targeted by customers because of their health image, wide range of products or bulk packs, Aldi is all about saving. "In everything we do, in every decision, we try to minimize expenses and costs," said Chris Daniels, Regional Vice President Northeast of Aldi U.S. He points to the shorter opening hours, the smaller shop areas and even the locations of the waste containers, which reduces the time spent on waste disposal. "Everything is analysed."

With the goal of having more than 3,000 stores by the end of 2028, Aldi U.S. wants to operate more grocery stores in the United States than any other chain except Walmart. In 2024, Aldi generated around $29 billion in sales in the U.S., according to an analysis by Scott Moses, partner and head of investment banking for grocery, pharmacies and restaurants at Solomon Partners, well ahead of Trader Joe's, which reached up to $20 billion in sales. What not everyone knows: Both chains have common roots. Aldi's founders were brothers who later split the company: Aldi Süd, which operates as Aldi in the USA, and Aldi Nord, whose owner took over Trader Joe's in 1979.

The similarities between Aldi and TJ's are obvious: compact stores, limited selection, loyal customers, low prices, although Aldi is usually cheaper. Both benefit from the new US love of Private labels, which gained popularity during the pandemic as customers bought what was available and found that they liked the cheaper alternatives. Private labels have since evolved from embarrassing, second-rate copies of popular branded products to cleverly packaged inexpensive alternatives , often in the same or even higher quality. Aldi sells almost exclusively its own brands and complements the food bargains with the popular middle aisle: a rotating range of non-food items with often higher margins.

The weaker business in Europe makes Aldi's growing bet on US customers all the more important and not only in economically difficult times. The brand is also trying to attract wealthier customers who contribute disproportionately to the growth of the American economy. This is reflected in a "premium" wine collection, a wide range of fresh organic meats and vegetables, and a wide selection of cold cuts and cheeses, now including a burrata for $4.65. In an Aldi parking lot, you can now see "every kind of car, from the Mercedes down," said Joe Feldman, senior managing director and food retail analyst at Telsey Advisory Group.

Aldi Nord took a different approach to international expansion than Aldi Süd. In the early 1980s, shortly after the acquisition of Trader Joe's, then a somewhat idiosyncratic chain in California, Theo Albrecht acquired a 10% stake in Idaho-based retail giant Albertsons. (His family, which still owns Trader Joe's to this day, left later.) Karl Albrecht, on the other hand, decided to export the Aldi Süd brand: in 1976, he confused customers in Iowa when he transformed a Giant supermarket into a market with a lean assortment without individual price tags, without shopping bags and without proper shelves. Soon dozens of other changes in the Midwest followed, and he deleted the "SÜD/South" in the brand name.

In Europe, both brothers were slow at first, which gave rival Lidl space. After years of copying, Lidl founder Dieter Schwarz set out on a major expansion in Eastern and Southern Europe after the Cold War, thus becoming a greater threat to Aldis in Germany itself. Lidl had advantages: Schwarz, as the majority owner, was able to make quick and courageous decisions, while the next Aldi generation had difficulties modernizing the model. After Theo's death in 2010, the situation worsened when the Aldi Nord heirs were sued in German courts. to control, a public conflict for a very reclusive family. When European growth slowed, the heirs of Karl Albrecht, who died in 2014 at the age of 94, looked more closely to the USA in order to finally reap yields after almost 40 years of service, despite great caution for fear of expensive mistakes.

A more aggressive expansion in the USA fell to an American: Jason Hart, who joined in the early 1990s after graduating from Indiana University. He was considered ideal for bridging the transatlantic cultural divide: modest, ascetic, thrifty, rising from his own ranks, starting as a trainee for district managers in a suburb of Indianapolis. When the US slid into the financial crisis in 2008, Aldi had almost 1,000 stores in the country and opened about 80 more per year. Hart, then US president of the company, recognized the opportunity to turn millions more Americans into Aldi customers during the crisis.

In February 2011, Aldi opened its first location in New York City, in a shopping center overlooking the Long Island Expressway in Queens. Hardly anyone in the USA noticed this, but for German journalists it became a place of pilgrimage. Some noticed that there were products such as Haribo gummy bears and Nuremberg bratwurst from the meat factory of former footballer Uli Hoeneß. However, the principle was decisive: low prices, high quality. In 2013, the expansion went into turbo when rumors arose that Lidl was planning a major US entry. Aldi announced at the time that it would almost double the pace of U.S. openings, and after Hart became CEO of Aldi U.S. two years later, an additional U.S. investment of US$5 billion followed. (Hart, now COO of Aldi Süd Holding in Salzburg, declined to speak to Bloomberg Businessweek.)

Aldi further adapted the offer to US wishes: artificial colours in private labels were removed, organic fruit and vegetables as well as meat without antibiotics were introduced, according to its own information at prices up to 50% below those of traditional supermarkets. In 2024, Aldi acquired Winn-Dixie and Harvey's Supermarket in the Southeast, announcing a $9 billion investment to open 800 more stores. While Lidl struggled in the USA, Aldi was named Retailer of the Year by Progressive Grocer. The magazine highlighted the company's appeal to "inflation-stricken consumers" and its growing number of loyal customers. A year earlier, Hart had explained on "Good Morning America" how Aldi had been a comfort to many when food prices rose 13.5% year-on-year. While national food brands struggle with "inefficient distribution" and expensive advertising, Hart said, his company has designed products and stores in such a way that all costs are saved as much as possible. "Aldi is different for a reason," he said. "With the goal of running an efficient company and passing these savings on to the customer."

The cost-cutting measures lead to lower prices than those of the competition. The Chomps meat stick, which is offered at Aldi for $2.39, is identical to the $3.49 variant that was available in New York stores at Target in December. But instead of an employee at Aldi hanging each stick individually on a hook, which can take up to ten minutes, the sticks are presented in their original packaging. "Everything can be refilled in just two to five seconds," estimates Matt Meloy, senior vice president of sales at Chomps. Together with Aldi, the company developed packaging specially tailored to the needs of the supermarket chain, in which the focus was on fast presentation.

For customers, the biggest savings are often on private labels. More than 90% of the items are Aldi's own brands; there are no additional advertising and marketing costs (Aldi even prints several barcodes on its own brands so that cashiers can scan faster). The products don't necessarily bear the name "Aldi" and are often right next to the few well-known brands: A red bag of Doritos from Frito-Lay costs 3 dollars, next to it a red bag of Clancy's Nacho Cheese tortilla chips for 1.59 dollars. Hellmann's mayonnaise in a classic design competes, almost twice as expensive, with Burman's, also in a blue and yellow look, in the neighbouring box.

Taylor Hoyt, a former purchasing manager at Aldi and now a partner at private label consultancy Plaid Grocery, said the limited choice is also efficient for suppliers: For Aldi, they often only have to produce one or two pack sizes instead of ten or so for other chains and can offer Aldi lower prices. However, some consumer goods giants are not very enthusiastic about Aldi's copies. Aldi can observe trends and develop its own versions, as Jordan Lack, now Chief Commercial Officer of Aldi Australia, explained in an Australian parliamentary hearing on supermarket prices in 2024.

"We don't have the corresponding marketing costs or brand costs that typical brands have," Lack said. In a lawsuit against Aldi last year, Mondelez International accused the retailer of "brazenly" copying many products and cited seven examples. Mondelez said it had invested "hundreds of millions of dollars" in advertising and marketing Oreo products over the past five years, only to find that Aldi had simply copied them. (Lidl, which also sells an Oreo copy, was not sued.) In fact, the packaging of Aldi's "Benton's Original Chocolate Sandwich Cookies With Vanilla Filling" ($2.75) is strikingly similar to Oreo's, including the blue background, white milk drops, and the cookie itself, as noted in the lawsuit. In a court filing, Aldi rejected the allegations, although court documents show that the parties are in settlement negotiations. (Aldi Süd declined to comment on the lawsuit.)

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With the limited range, Aldi cannot fulfil every wish. What is lacking in completeness, however, is compensated for by the "discovery frenzy". Aldi advertises with the legendary middle aisle, many types of packaged meat and freezers with inexpensive fish. (At one store in the Bronx, frozen plaice cost $4.39 a pound in August, compared with about $20 for fresh produce at a nearby farmer's market.) Recent rotation items included lined winter clogs, a cotton candy machine, Rao's pasta sauce, and German canned herring. Aldi fans have their favourite deals: For student Jake Kohanzo in Boca Raton, Florida, it is the ground beef from grass-fed cattle, of which he eats around a kilo a day. Dierdre Harris, a technician for Internet and telephone repairs in Highland Mills, New York, raves about the twelve-grain bread and the inexpensive candles. Antela Goleen, a nursing assistant from Bridgeport, Connecticut, loves the fresh fruits and vegetables.

"In the discount model, there is a tension between maximum efficiency and minimal disruption to consumers," said Jefferson Bell, senior manager at Accenture, and a specialist in food, beverages and consumer goods. More and more American consumers of all income groups are willing to accept compromises if they can save money as a result. This explains why Aldi was the fastest-growing U.S. supermarket chain in 2024, according to real estate firm Jones Lang LaSalle, both in terms of new store openings and sales space. Of the Aldi stores that opened at the end of 2025, almost two-thirds are in middle- to high-income postcode areas, according to an analysis by RetailStat, a company that evaluates retail financial and location data. "The stigma of cheap shopping is long outdated," says Michael Infranco, deputy vice president at RetailStat.

Meanwhile, Aldi continues to modernize in the USA. In September, the retailer announced a major design revision of its own-brand packaging: its own name will be on every own-brand product in the future. Later this year, the "boldest location" to date is also to open: a 2,300-square-meter branch on the ground floor of Ellery, a high-rise residential building near Times Square in New York.

Few would expect a 32-story luxury tower, in which the air conditioning pumps fragrances through the ventilation ducts and a studio apartment costs $4,675 a month in rent, as the location of a discount store. But even the tenants of the Ellery are looking forward to unbeatable bargains, said Gus Tsolis, the chief concierge. Tsolis, who first met Aldi in Connecticut, is particularly excited about Aldi's six-pack frozen burgers, for less than a hot dog from nearby street vendors. Such offers attract him again and again. And when he's there, he stocks up right away. "I always buy three or four packs at a time," says Tsolis.

Read more: Aldi in den USA auf Erfolgskurs: Expansion, Eigenmarken und Lidl-Druck in Europa - Bloomberg

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