Jan 18, 2024 - Business

America's hidden grocery winner: What's fueling Aldi's growth

Illustration of Benjamin Franklin in a red apron holding a bag of groceries

Illustration: Sarah Grillo/Axios

A powerful mix of high inflation, cheap wine and an "aisle of shame" have made Aldi the fastest-growing grocery store chain in the country.

Why it matters: More Americans are turning to the no-frills discount grocer known for its lower prices and quirky ways it saves money.

State of play: Aldi stores are smaller than your neighborhood Kroger or Publix with less selection — more than 90% of Aldi products are private label.

  • Stores have fewer employees, make you bag your groceries and charge a quarter to "rent" a shopping cart.
  • "It's all those little things that add up," Scott Patton, the retailer's vice president of national buying, told Axios. "It just makes it simple for the customer."

The big picture: Aldi — which first opened as "Albrecht Discount" in Germany over 60 years ago — has seen more shoppers flock to its stores as the company has continued its U.S. expansion and shoppers look to save, Patton said.

  • The first U.S. Aldi opened in 1976 in Iowa and today there are 2,357 locations in 38 states and Washington D.C.

Aldi store openings and growth

What's next: Patton said by adding more locations the company can make it more convenient for shoppers.

  • "Our growth trajectory has been very strong for the past several years," Patton said, noting it's "going to increase over the next five years."

Meanwhile, Aldi is acquiring about 400 Winn-Dixie and Harvey Supermarket stores from Southeastern Grocers in a deal expected to close in the first half of 2024.

  • Aldi told Axios the companies continue to operate separately and independently until the transaction closes.
Aldi storefront at night
Aldi has been quickly expanding across the country. Photo: Kelly Tyko/Axios

More about Aldi shopping carts and more

Here are a few things that make Aldi different than traditional grocery stores.

Bring a quarter to shop at Aldi if you want to use a shopping cart, which is a more common practice in Europe.

  • You'll get the quarter back as long as you return the cart to the cart corral.

Don't forget reusable bags as Aldi doesn't provide free bags but does sell paper and a variety of other bags.

Winking Owl wine — $3.45 a bottle — has gained a cult following among budget booze buffs.

  • Not all Aldi stores sell alcohol because of state or local laws.

Aldi Finds are the retailer's limited-time items and are usually located on an aisle that has many nicknames including, "Aisle of Shame" or "fun aisle."

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