Aldi targets 3,000 stores to undercut major grocery chains

Aldi intends to operate more than 3,000 locations in the United States by the end of 2028, a scale that would place it second only to Walmart in total store count.

The German grocery chain generated approximately $29 billion in U.S. sales in 2024, surpassing the revenue of domestic rivals like Trader Joe’s. This financial performance reflects a business model that prioritizes low costs over convenience. The company maintains that its pricing strategy forces competitors to lower their own markups, a dynamic confirmed by recent industry analyses.

Aldi’s ability to match or beat prices set by giants like Walmart and Costco stems from two primary operational tactics. First, the retailer stocks more than 80 percent of its shelves with private-label products. These items, such as Benton’s Chocolate Sandwich Cookies, mimic the appearance of national brands but avoid the associated manufacturer markups. Second, the chain limits its inventory to essential items. By carrying only one version of a product, Aldi buys in bulk and reduces waste, spoilage, and storage requirements. This approach requires shoppers to visit other stores for niche items, but it drives down the cost of the staples that Aldi does carry.

Industry observers note that this model has influenced the broader market. Food reporter Deena Shanker stated that her comparison shopping over several months found Aldi prices to be either on par with or slightly lower than Walmart’s. A late 2023 analysis of Lidl, a German competitor with a similar model, found that grocery chains reduced markups by approximately 7 percent in areas where Lidl stores opened. Major grocers including Wegmans and Kroger have announced defensive price reductions in response to the pressure from these budget-focused chains.

The expansion strategy also includes efforts to attract higher-income customers without abandoning the core bargain model. Stores now offer rotating seasonal items and specific premium products, such as Honeycrisp apples and higher-end wines, alongside standard low-cost goods. This mix aims to make the shopping experience feel like a hunt for deals rather than a compromise on quality. The company has positioned its stores near competitors to facilitate multi-store shopping trips.

Aldi’s growth has accelerated during periods of economic stress, including the Great Recession and the current inflationary environment. The chain was founded in post-war Germany in 1946, and its current U.S. footprint represents the culmination of an 80-year strategy. The planned expansion to 3,000 stores by 2028 is set to increase competition in a market where food affordability has become a central concern for working families.