Aldi moves into Walmar's backyard

Aldi opened a store in Bentonville in October. It is part of Aldis $ 5 billion plan to expand to 2,500 stores in America by the end of 2022, up from around 1,900 today. Aldi is on track to become the third largest grocery chain in the country behind Walmart ( WMT ) and Kroger ( KR ] .

"There is a lot of buzz in northwest Arkansas about the new Aldi store," said Annibal Sodero, a former assistant professor of Supply Chain Management at the University of Arkansas, Aldi posing a "significant threat" to Walmart

On a sign in the Bentonville Center, Aldi cited a customer survey that found it was "value leader" in front of Walmart and Kroger.

Kroger Albertsons, Costco, and other big merchants run by Walmart's hometown, Sam Walton stationed Walmart's headquarters in Bentonville nearly five decades ago, and the dealer's footprint is on display throughout the city, from Walmart distribution centers and petrol stations to Bentonville. around Walmart.

But Aldi hopes to win over Walmart customers in Bentonville with rock bottom prices, an approximately 22,000 square meter small shop and private brands: Clancy's pretzels, Chef's Cup chicken noodle soup similar to Campbell, and Belle Vie sparkling water, similar to LaCroix.

More than 90% of the brands Aldi sells their own private labels, and the store stores only about 1[ads1]400 different items – compared to around 40,000 in traditional supermarkets and over 100,000 in Walmart supercents.

Aldi also has several characteristics not typical of other American food stores.

Customers need about to rent a cart, which they return after returning their shopping carts. Plastic and paper bags are only available for a fee. And at checkout, the cashier throws away shoppers and expects them to pose their own groceries in a separate place away from the cash register. These tactics help Aldi reduce labor costs.

Despite the minor drawbacks for the customers, Aldi looks to get traction in Bentonville. "The store is in a very good location with high traffic volume in a growing part of northwest Arkansas, which is very strategic," said Sodero.

Walmart executives take Aldi seriously and have lowered prices in some markets to counter Aldi.

On a visit to Walmart headquarters this week, Aldi was one of the brands listed on a sign about where budget-conscious customers interact with Walmart, Family Dollar and Dollar General.

But Aldi is not just winning low-income customers. has attracted richer customers who want to save on their grocery bills.

"I never underestimate them," said Walter, US chief Greg Foran, at a retail trade conference in March. "I've been competing against Aldi for 20 plus years. They are strong and they are good. "

  Aldi in Bentonville has dedicated wine and craft beer.
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