How Aldi is taking on US supermarkets with its $4 almond butter
German discounter Aldi opens a store in a luxury Manhattan building, selling almond butter for $4 compared to $22 elsewhere, as part of a $9bn US expansion plan targeting 800 new locations.
When Mary Porter walked into Manhattan's newest Aldi store hunting for bargains, the 79-year-old found a $4 jar of almond butter that costs $22 in her own neighbourhood. The store is tucked away in an underground parking lot beneath The Ellery, a luxury apartment complex where the cheapest rent starts at nearly $5,000 a month. The building's website omits the discount grocer, instead highlighting pricier options like Whole Foods.
Aldi's US expansion plan involves $9bn to add 800 stores over five years, focusing on dense urban areas. The German discounter first entered the US in 1976 and now operates nearly 2,800 stores. In the UK, Aldi commands 10.8% of the market, becoming the fourth largest grocer.
In the US, Aldi holds only 2.9% of the grocery market compared to Walmart's 20%. Analysts say Aldi's smaller size is an advantage. Data from Placer.ai shows Aldi is attracting middle- and higher-income shoppers earning $75,000–$125,000, as inflation pushes wealthier households to seek bargains.
Logistics in Manhattan are challenging. Supply trucks come from South Windsor, Connecticut, using shorter vehicles and two-driver teams to navigate tight streets. Three to four trips are made nightly. Real estate costs are a major hurdle, with average asking rents between $350 and $700 per square foot.
Jerry Sheldon of IHL Group notes Walmart invests over $20bn annually in technology and automation. "Aldi is a brilliant single-purpose machine, while Walmart is a money machine that happens to sell groceries cheaply," he says. For shoppers like Mary Porter, the corporate strategy matters less than immediate savings: "I get on the subway with my big bag and go home with my cheap groceries."
