The European discount chain is the fastest-growing retailer across the Atlantic
famously stingy when shopping for food. No wonder that it was two German brothers, Theo and Karl Albrecht, who in the 1950s founded Aldi, the world’s first discount grocer. In 1961 they carved up the European market between Aldi Nord, led by Theo, and Aldi Süd, headed by Karl. But despite pioneering the business model, the two Aldis are having their lunch eaten in Europe by Lidl, a younger rival whose sales on the continent exceed their combined total.
Last year Aldi Süd announced the takeover of around 400 Winn-Dixie and Harveys supermarkets in Alabama, Florida, Georgia, Louisiana and Mississippi. Many of them will be remodelled as Aldi markets. And earlier this month Jason Hart, who heads Aldi Süd’s American business, promised to pick up the pace. He said the company will invest $9bn over five years to open 800 new Aldis , on top of the 2,400 it already has.
Mr Hart has succeeded where most rivals have struggled partly thanks to luck. Aldi’s rock-bottom prices appeal to Americans irked by food inflation. Although food prices are no longer rocketing, they are 23% higher today than they were four years ago. President Joe Biden rails against punier Snickers bars and fewer crisps per packet in his re-election campaign.) to challenge the $25bn takeover of Albertsons, the second-largest supermarket chain by sales, by Kroger, the largest.
Still, luck isn’t everything. Other discounters, including Lidl, have not grown nearly as fast as Aldi Süd. Mr Hart has pulled it off by focusing on bare but astutely managed essentials. Aldis offer far fewer choices than rival outlets: 1,600 products, on average, compared with 31,000 for a typical American supermarket and 4,000 for the already spare Trader Joe’s. That lets it keep shops small, bringing down property and utility costs.