By Cecilia Chan, GSN Managing Editor
A no-frills German discount-grocery chain that sells its own brand is making its first foray into Arizona with two locations planned for Gilbert.
The planning commission approved the site plan for an Aldi grocery store at the southeast corner of Arizona Avenue and Desert Lane in September, and last week it reviewed the site plan for a second location at the southwest corner of Pecos Road and Market Street.
The latter plan is expected to come back for approval before commissioners either Nov. 5 or Dec. 5, according to planner Sydney Bethel.
“The grocery chain is popular in the Midwest and is now starting to come to Arizona,” Bethel said.
Aldi operates more than 1,600 stores in 35 states in the United States. The company’s corporate office in Batavia, Illinois, announced last year it will expand its reach by spending $3.4 billion to increase the number of stores to 2,500 nationally by the end of 2022.
The expansion will make Aldi the third largest grocery store by count in the country, according to the company.
Aldi spokeswoman declined to say when the two Gilbert stores will open or the number or location of other stores planned for Arizona.
“The company is currently exploring opportunities in Arizona as well as several other markets,” Aldi spokeswoman said. “At this time, we don’t have specific information about expansion areas or potential store locations.”
Aldi is reportedly building stores in about half a dozen other Valley cities and a regional headquarters and distribution site in Goodyear.
Aldi is currently ranked No. 15 in the country for sale volume behind No. 1 Walmart and No. 2 Kroger, according to a 2018 directory by Chain Store Guides.
According to Aldi, more than 40 million customers each month save up to 50 percent on their grocery bills by buying its exclusive brand. Store shelves also stock a limited selection of national brands.
Aldi brands are made by many of the country’s leading food producers and meet or exceed the quality of national name brands, according to the company.
Aldi also sells household items such as vacuum cleaners and touts it was the first grocery store to offer all of its exclusive products free of certified synthetic colors, added trans fat and added MSG.
Other ways Aldi keeps cost low is limited hours of operation, having only three to five employees work in a store at any given time and requiring customers to bring their own bags or buy reusable ones at checkout.
And customers who want to use a shopping cart must first deposit a quarter, which they get back when they return it.
The cart rental system means Aldi doesn’t have to hire someone to police the carts, passing along the savings to customers. Additionally, there are no stray carts littering the parking lot or causing dents to cars.
The Aldi store planned near Arizona Avenue is about 19,000 square feet in size and will sit on 2.27 acres in the middle of an 8.49-acre site, which is currently occupied by an abandoned vehicle sales building and accompanying parking lot, according to town planners.
The master plan for the entire acreage calls for two future retail pad sites, one shop building and a potential light-industrial building.
The second Aldi store at 20,442 square feet is proposed on 5.54 acres at the 34.79-acre Val Vista Square, which currently has a Unison Bank on the largely vacant site.
According to the company’s website, Anna Albrecht opened a corner grocery store in 1913 in Essen, Germany. The name Albrecht Discount was shortened to Aldi in 1962.
By 1948, Albrecht’s two sons took over the business and expanded it, breaking into the U.S. market in 1976 in Iowa and the European market in the 1990s. The family purchased Trader Joe’s in 1979.
Aldi’s growth plan also includes $1.6 billion to remodel 1,300 stores by 2020, according to a company news release.
A second low-price German grocery chain also is making inroads into the United States. It stocks many of its own brands and customers must bring their own bags or buy one.
Lidl, which first opened in 1973 outside of Frankfurt, Germany is now over 10,000 stores strong in 28 countries, according to the company’s website.
The company broke into the U.S. market in 2017 with 20 stores in Virginia, North Carolina and South Carolina and announced it planned to open up to 100 stores across the East Coast by 2018. However, a bumpy start had the company reportedly halving its store expansion by 50.