Nearly two years ago, Aldi said it would spend $34 million in Minnesota expanding and renovating stores. It planned to remodel 28 stores throughout the state and open two to four new stores per year as part of its $5 billion investment in U.S. expansion. Nationally, 1,300 stores will be remodeled and 900 added.
Not only will it meet its Minnesota goal, it's exceeding it. Twenty-five stores throughout the state have already been remodeled and two more will be by the end of the year including the Minneapolis Franklin Ave store (now closed for three months for expansion) and Little Canada. Thirteen more stores are set to be remodeled in 2020 and beyond to complete the refresh.
New stores opening in Minnesota this year include Minneapolis near Uptown, Richfield 494 and Lyndale, St Paul Phalen, St. Paul Sibley Plaza, Lakeville, Chaska, Chanhassen, Cloquet and one more in the north metro to be announced.
At this rate, Aldi will have 70 supermarkets in Minnesota by the end of 2019, just a handful shy of Cub, which has 77 stores in Minnesota. After its $5 billion investment nationally, Aldi will become the third largest in the country by store count, behind Walmart and Kroger.
Still, Aldi's market share in the Twin Cities (about 3%) is a fraction of Cub's (about 20%), according to Chain Store Guide's 2016 market share report. In the last three years, Supervalu (Cub's parent company, now owned by UNFI) has remodeled nearly 30 Cub stores across the state, although the stores remain open during the remodel.
Aldi's store size is also significantly smaller than Cub's. Its newest stores are about 10,000 to 12,000 square feet while new Cub and Hy-Vee stores range from 60,000 to 95,000. Phil Lempert, a supermarket analyst and founder of Supermarketguru.com, believes that a 12,000 square feet size fits many consumers just fine. "While there were some complaints about smaller selection, Aldi has altered to respond by increasing produce (including organics) and frozens," Lempert said in an email.
In early May, Cub will join the mini-store trend by opening its smallest store, a 46,000 square feet footprint in a mixed use building at 46th and Hiawatha in Minneapolis.
Aldi's remodeling of its stores and expanding its grocery selection is paying off. "We are seeing significant growth in key markets such as Minnesota, California, Texas, the Carolinas, Georgia and New York," said Matt Lilla, divisional vice-president of Aldi's Faribault division. "Our expansion is all about reaching new shoppers and it's working."
Many of its new customers are in the suburbs where Aldi is gaining appeal by offering more organic produce and meats, fresh "never frozen" seafood, and gluten-free items. "It is noteworthy in that it means shoppers are able to find these products at Aldi, giving them one less reason to shop at a conventional supermarket," said Brian Numainville, principal at the Retail Feedback Group.
In a recent survey conducted by the Retail Feedback Group, Aldi scored higher than Walmart and conventional supermarkets in categories such as value for money spent, checkout speed and efficiency, plan to shop there more, and more likely to recommend the store. "All of this amounts to a win for Aldi as they continue to add and remodel stores throughout the country," said Numainville.