According to Business Insider, a German discount chain, Aldi Inc. may become the third largest grocery chain in the US within the next four years. Aldi is targeting other grocery giants, such as Wal-Mart Stores, Inc. (NYSE: WMT) and Whole Foods Market, Inc. (NASDAQ: WFM), by planning to invest 3.4 billion in 900 new stores across the US by 2022. By the end of 2018 alone, the grocery chain plans to add an extra 400 stores and remodel another 1,300 in the US.
Albi’s investments will raise their total capital expenditures to at least $5 billion this year alone and potentially expand this relatively, uncommon brand into the largest grocery chain, besides Wal-Mart and Kroger. Aldi US CEO Jason Hart has stated, “We pioneered a grocery model built around value, convenience, quality, and selection, and now Aldi is one of America’s favorite and fastest growing retailers”.
“Growing at a time when other retailers are struggling”, Hart included that Aldi’s prices were also up to 50 percent cheaper than conventional grocery stores. There has been 18 bankruptcies in the US grocery market since 2014 alone. Aldi’s completion of their 2,500 stores would equal 53 percent of Wal-Mart’s US outlets and ultimately create 25,000 US jobs.
Wal-Mart, the single largest US grocer, may combat the growth of the expanding company by testing a drop in prices in 11 US states in an attempt to undercut Aldi and other rivals. The world’s biggest retailer will also invest an estimate of $6 billion to reclaim their position as the low price leader.