Aldi's No-Frills Setup Doesn't Just Target Budget Shoppers

New Yorkers don't usually line up before dawn for a supermarket, but a recent Brooklyn opening showed just how far Aldi's American following will go for cheaper groceries and a free tote bag. The German discount chain, long a cult favorite among budget-minded shoppers, is now on track to become the No. 2 grocer in America by store count, behind only Walmart, with a goal of more than 3,000 US stores by 2028, reports Bloomberg. Aldi's US sales hit roughly $29 billion in 2024, outpacing its better-known sibling Trader Joe's—an odd twist, given that the two chains share roots in the same German family.

The business model is relentless efficiency: small stores, limited assortment and hours, a lineup that's more than 90% private-label, and even shopping carts you need to leave a 25-cent deposit for. All of this lets Aldi undercut rivals on staples and copy popular branded products with cheaper look-alikes, a strategy that has won over shoppers but also drawn lawsuits, including a pending case from Oreo maker Mondelez that accuses Aldi of mimicking its cookies. The chain's bare-bones setup can mean messy aisles and sparse produce, especially in busier urban stores, but fans tolerate the rough edges for the prices and the "hunt"—including the rotating middle aisle of nonfood deals.

Aldi has leaned into US growth even as it struggles to keep its discount crown at home, where rival Lidl is slashing prices. With momentum slowing in Europe, Aldi is betting heavily on overseas markets, particularly the US and China. More than 125 store openings are set for this year alone in the US, per GlobalData. "The expansion includes entering Colorado for the first time, continued growth in Western and Southeastern markets, and the construction of three new distribution centers," notes Supermarket News of upcoming plans.

In America, Aldi is now also going after higher-income shoppers, notes Bloomberg. Recent moves include organic fruits and veggies, antibiotic-free meats, "premium" wines, elaborate cheese and charcuterie options, Instacart delivery, a $9 billion plan for 800 more stores, and an outpost coming to a luxury high-rise near Times Square. Analysts say the stigma around no-frills chains has largely evaporated, and Aldi's formula of traded comforts for lower costs appears to be landing with a broad swath of consumers willing to bag their own groceries.