High inflation benefits "discount supermarkets"! Aldi is forging ahead, with growth in U.S. market share rivaling Walmart and Costco

Persistent food inflation is profoundly reshaping the U.S. retail landscape, and German discount supermarket Aldi has emerged as the main beneficiary of this round of structural adjustment.

According to the Financial Times, this privately-owned discount retail giant is accelerating its expansion at the rate of opening a new store every few days, with a new location launched this week on 42nd Street in Manhattan. Data from Morgan Stanley shows that Aldi’s market share growth in the U.S. is now on par with leading retailers such as Walmart, Sam's Club, and Costco. Scott Patton, Chief Commercial Officer of Aldi USA, stated: “We do not set a cap. Our goal is to win share from all grocery retail channels.”

Backed by a $9 billion investment plan, Aldi is vigorously advancing its expansion in the U.S. market, aiming to open 3,200 stores by 2028, with a long-term vision of around 4,000 stores. As the number of its locations is expected to surpass Kroger (the second-largest grocery retailer in the U.S. after Walmart) in the coming months, Aldi’s impact on the U.S. grocery retail landscape is set to intensify further.

Accelerated Expansion with Store Scale Targeting Kroger

Aldi now has 2,671 stores across the U.S., maintaining an accelerated expansion pace with a new store opening every few days. Next, Colorado, Arizona, and Florida are identified as key growth regions, with 50 new stores planned in Colorado alone.

Dan Gavin, National Vice President of Real Estate at Aldi, said: “In the U.S., we see easily more than 4,000 site opportunities, and possibly more.”

According to estimates from Morgan Stanley, Aldi’s U.S. market revenue last year was about $30 billion—still less than half the size of Albertsons—but in the context of overall sluggish food sales in the U.S., it continues to achieve double-digit growth. Data from Kearney consulting shows that Aldi currently accounts for only 4% of total national grocery spending, leaving considerable room for future growth.

An Efficiency Revolution Behind Low Prices

Aldi’s core competitiveness derives from its highly streamlined operating model. Stores typically employ only about six staff members, products are displayed in full cases, and shopping carts use a coin deposit and refund system at checkout. These operational cost savings are translated directly into highly competitive end prices—for example, macaroni is just $0.59, cookies are priced at $2.19, and nearly 90% of goods are private label, generally priced well below comparable national brands.

As a private enterprise, Aldi operates with a long-term orientation, prioritizing market share over short-term profits. This strategy has seen success in Europe: after entering the UK market in 1990, Aldi achieved substantial growth following the 2008 financial crisis and now commands 10.8% of the UK grocery market share.

Adam Ifshin, CEO of shopping center operator DLC Management, compared Aldi’s business philosophy to Walmart founder Sam Walton’s spirit of frugality, stating that Aldi “brought the essence of Walmart back to Germany and elevated it further.”

Private Label Faces Infringement Controversy and the “One-Stop Shop” Dilemma

Aldi’s private label strategy has also triggered legal disputes. Food giant Mondelez International has filed lawsuits accusing Aldi of “blatantly copying” the packaging of brands like Oreo and Wheat Thins. Aldi has countered that Mondelez, over the years, has only raised concerns privately without taking action, which in effect constitutes tacit consent. Currently, Aldi is launching redesigned packaging and is seeking a settlement with Mondelez based on recent court notifications.

As for market prospects, analysts are cautious about whether Aldi can replicate its European success in the U.S. Mirko Warschun, Senior Partner at Kearney, noted that American consumers place more value on one-stop shopping and product assortment breadth, potentially limiting Aldi’s market share ceiling.

In response, Aldi USA Chief Commercial Officer Scott Patton acknowledged the positioning limitation: “We will not be a one-stop shop. Customers can get 80% to 90% of their needs here, and supplement the remainder elsewhere.” This pragmatic statement demonstrates Aldi’s clear awareness of the characteristics of the U.S. market behind its rapid expansion.