German Grocer Aldi To Heat Up U.S. Competition

German Discount Grocer Aldi Sets U.S. Expansion Plan

Aldi says it will open nearly 900 stores, invest $5 billion over five years

Aldi says it will open 900 stores and invest $5 billion over five years. Photo by Anthony Devlin/Zuma Press

By Heather Haddon
June 11, 2017 9:00 p.m. ET

Competition in the U.S. grocery sector is about to get more fierce.

Discount grocery chain Aldi is expected to unveil on Monday plans to invest $5 billion to open nearly 900 stores and remodel hundreds more in the U.S.

The expansion, over the next five years, puts the German grocer on track to becoming the third-largest food retailer in the U.S. by store count, behind the larger Wal-Mart Stores Inc. and Kroger Co., and a growing threat to traditional food retailers.

Aldi said it is expected to have a total of 2,500 locations across the U.S. by 2022. Its plan comes as another German discounter, Lidl, is set to open its first 10 stores in the U.S. on Thursday as part of a multiyear expansion.

Executives at Wal-Mart and Kroger have been preparing for the growth of the discounters for years. Wal-Mart has been sprucing up its stores and slashing prices on some products in select markets, while Kroger continues to drive down costs to compete.

But the discounters could have a big impact on the U.S. grocery market as they did in Europe. Their market share there has steadily grown while traditional supermarkets have seen theirs fall.

Deep discount chains in the U.S. are expected to grow by up to 10% a year through 2020, five times the rate of traditional grocers, according to a recent report by consulting firm Bain & Co.

“It should absolutely be more than scary to traditional grocers and retailers,” said Mikey Vu, a partner in Bain’s retail practice.

Many shoppers in the U.S. are unfamiliar with Aldi. The chain has been in the U.S. since

Tennessee may modernize antiquated beverage alcohol laws

Tennessee has some very strange and peculiar laws regarding the regulation of beverage alcohol, most of which remain rooted in the Prohibition Era, and in in fear.

And, true to form, it would be no wonder that Baptists – the arch-conservative religious political right wing activists of the right wing party – are directly involved in efforts to keep the state mired in the antiquated bad old days of yore.

Tennessee is unique in the regard that state law forbids sale of wine except in state-licensed liquor stores. To clarify, the state of Tennessee has an unusual combination of laws that forbid sales of wine in any other type store save one that sells liquor. Further, sales are prohibited on Sunday. Beer, however, is able to be sold in grocery stores… but only if the ABV (Alcohol By Volume) is under 6%.

Alabama once had a similarly prohibitive content law, along with bottle size restriction – which severely limited the sales of domestic and imported craft/micro brew beers and ales. Alabama no longer has such prohibitive limitations.

And then, if one considers the implications of that law – mandating the sale of wine be exclusively limited to sales in liquor stores – the state actually sanctions the liquor enterprise itself, rather than being a neutral, regulatory body. In Tennessee there are no state-operated liquor stores as there are in Alabama. To have a state-run enterprise is not contradictory to the free market, because the state is a direct competitor in the market, which frequently has the lowest priced products, because taxes are the markup/profit margin for the state. Contrasting that model with the private retailer, the private retailer must make a profit atop the taxes which the state charges (after they purchase from the state at a wholesale cost – the same cost the state sells to the general public), thus increasing the retail price above what the state sells it.

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Supporters and opponents of a bill that would let grocery and convenience stores sell wine undertook one final push to sway Tennessee lawmakers Monday ahead of a make-or-break vote in the state legislature.

Liquor store owners, grocery store operators, wine shoppers, a sheriff, an addiction specialist and a minister were among the people allowed to testify at a special hearing held a day before the Senate State & Local Government Committee is to vote on the biggest rewrite of Tennessee’s liquor laws in decades. Members guarded