Aldi Enters Big Apple Easily, Unlike Walmart

German discount retailer has big plans for the Big Apple, and New Yorkers are warming up to its low prices.

March 31, 2011

NEW YORK - Despite a nonunion culture like Walmart??s, Aldi has faced little resistance entering New York, The New York Times reports.

Last month, virtually unopposed (indeed, a Queens politician showed up at the grand opening), discount retailer Aldi opened its first New York store and plans to open a second, in the Bronx, later this year.

The move follows a strategy that grocers and discount retailers have devised, building smaller stores in urban centers. And Aldi has been doing so quietly in cities around the country.

"They??re not only doing the small format more rapidly, but they??re getting into the urban areas more rapidly than either Walmart Express or the city Targets," said Craig Johnson, president of the consulting firm Customer Growth Partners. "Even though the company??s headquartered in Germany, they??ve opened up a New York store quicker than Walmart has.

"There??s no reason to oppose an Aldi ?" it??s a small format, and they usually get space from an existing landowner or landlord, a small guy who??s plugged into the community, not a big guy like a Forest City Ratner," Johnson said. "Walmart has sort of become a bad guy that there??s a concerted effort against. I??m not sure that Aldi has really gotten on anyone??s radar screen."

Over the past few years, Aldi has added more than 250 U.S. stores, with plans for 80 more this year and next.

More than 90 percent of Aldi??s products are private label, and their stores are set in drugstore-size spaces ?" less than 20,000 feet in many cases, compared to more than 100,000 square feet for the average Walmart.

Additionally, it carries a pared-down product line, which translates into a densely profitable retail space.

"It simplifies everything ?" supply chain, delivery," said Jason Hart, co-president of Aldi??s U.S. division. "You stock the stuff that??s the highest velocity and that you make the highest margin on."

As for whether New Yorkers are ready for the discounter with the somewhat quirky brand offerings, there??s definitely a learning curve involved.

"There is a little bit of an education that comes along with shopping the store," said Bruce Persohn, who oversees the region that includes New York City for Aldi.

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