Aldi invests $36M in Pittsburgh
Amid growing competition, the discount store steps up its game
Aldi is sinking more than $36 million into its Pittsburgh-area stores as the German deep discount grocery chain works to expand its foothold across the country amid tightening competition in the grocery business.
The first mark of Aldi’s investment was the reopening of its remodeled store in Robinson on Wednesday.
The upgrade includes wider aisles, as well as more fresh produce, meat, dairy and bakery items. The building also features more energy efficient lighting and refrigeration.
The Robinson location is the first of 36 stores in the region due to get a facelift by 2020. The plan is part of a $1.6 billion nationwide undertaking to remodel more than 1,300 U.S. stores in the next three years.
Aldi also plans to open new locations. In Allegheny County, a store is expected to open by the end of the year at the Pittsburgh Mills mall property in Frazer. The chain already has more than 1,600 stores in 35 states. By 2018, that number is expected to rise to nearly 2,000, according to Aldi.
The upgrades come as grocery chains are facing fierce competition. Traditional grocers are already dealing with persistently low food prices.
Last week, Amazon said it will pay $13.7 billion to snap up struggling high-end grocery chain Whole Foods, bringing the Seattle-based online giant’s online expertise to the brick-and-mortar sector.
Meanwhile, Aldi isn’t the only deep-discount chain in the game. Fellow no-frills German chain Lidl opened its first wave of stores in the U.S. this month.
“The U.S. is still under-penetrated by hard discounters, prompting accelerated growth by Aldi, Save-A-Lot and now Lidl,” Jennifer Bartashus, a Bloomberg analyst, said in a report. “Offering prices 15-30 percent below grocery stores, and up to 10 percent less than discount stores, they present a competitive threat to the likes of Kroger, Ahold Dehlaize and WalMart.”
Hard-discount grocery sales have been a relatively small part of U.S. shopping, but have been growing steadily, reaching $16.5 billion in 2015, according to Bloomberg, citing Euromonitor data.
Aldi isn’t new to the U.S. but it needs to stay on top of its game in the face of increased competition. The Robinson store, which opened in 2004 and has about 20 employees, reflects an effort to respond to consumer demands.
“We were interested in what our customers wanted to see,” said Carolyn Franco, director of operations for Aldi Inc.’s Saxonburg division. The remodeled store includes new product lines, including a larger selection of organic items, gluten-free items and a full line of baby products by Little Journey.
Stephanie Ritenbaugh: sritenbaugh@post-gazette.com or 412263-4910