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The Wall Street Journal has a long story this morning about how German discounter Aldi believes “it can win over spoiled American shoppers … By offering them fewer choices—way fewer—than rival retailers.”

Aldi has been successful in 18 countries, and generates $83 billion in sales, and this summer “opened a new chapter in this seemingly unstoppable expansion, announcing a $3.4 billion investment to boost its U.S. presence by nearly 50% to 2,500 stores by the end of 2022. This puts the company on a pace to become America’s third-biggest grocery retailer by locations behind Wal-Mart Stores Inc. and Kroger Co. The land grab closely followed its decision to invest $1.6 billion in renovating the bulk of its existing 1,700-plus U.S. stores, some of which have been around since the 1970s.”

Aldi’s “idiosyncratic playbook” has a strategy of offering “a deliberately pared-down selection, sometimes a tiny fraction of the number of items sold by rivals, which helps Aldi cut costs to levels U.S. grocers can only dream of. Among other benefits, fewer items means faster turnover, smaller stores, less rent, lower energy costs and fewer staff to stock the shelves … By keeping costs low, the Spartan assortment allowed the founders to sell their inventory for less and turn it over at lightning speed, boosting profit margins, according to former executives.”

You can read the full story here.
KC's View:
It is so interesting that Aldi has waited until now to really invest in a major US expansion, a time when there is more and better competition than ever, including Lidl, another German discounter that has begun opening stores here. They must see something about the market that makes them believe that more US consumers than ever will find the Aldi approach to groceries to be attractive and compelling…

To me, one of the major problems with which they have to deal is “nobody seems to give a crap” syndrome. Too many of the Aldi stores that I’ve visited seem like nobody is paying attention, but maybe that’s part of the appeal - they look cheap, so it isn’t hard to make that argument to shoppers.