Less Is More: Will Aldi's Expansion Plans Pay Off in a Crowded U.S. Grocery Market?

In 2024, the discount grocery retailer Aldi announced bold U.S. expansion plans. Within five years, the German company would increase its store count by 30% to reach 3,200+ stores across the United States and approach becoming the fifth largest grocery retailer in the country. Aldi had pioneered a unique business model underpinned by frugality, efficiency, and exacting standards to deliver low prices for customers. Several times the chain had reinvented its appeal. Two network-wide renovations a decade apart had drawn an increasingly broad consumer base, while the company had recently shifted its product mix to incorporate 40% more fresh food to address demand for healthy categories. As a lifelong employee, CEO Jason Hart had seen the company's U.S. foothold grow sixfold over three decades to reach an estimated $40 billion in revenue. Yet concerned with recent changes to retailing, Hart faced intense competition from other grocery chains with their own private label products, like Walmart, and online merchants, like Amazon. How should Aldi’s business model, designed for simplicity and with minimal staffing, respond to the competition? Should it offer home delivery? In-store pickup of preordered items? Further cut staff costs by fully switching to self-checkout? The success of the planned expansion might depend on getting such choices correct.