Competing With Giants: Aldi’s David-and-Goliath Battle Over America’s Groceries

Competing With Giants: Aldi’s David-and-Goliath Battle Over America’s Groceries

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  • Teaching Notes
Abstract

The grocery retail landscape is evolving at high speed. Consumer demand for faster, more convenient services continues to rise, and retailers are innovating to keep up. Competition in the grocery category, in particular, continues to intensify driven by three main players: Aldi, Amazon, and Walmart.

Aldi, a German family-owned discount supermarket chain, operates over 11,000 stores in 18 countries. The company entered the U.S. market in 1976 and has expanded from one store in Iowa to nearly 2,000 stores in 36 states in 2019. The no-frills discount grocery chain has made a big bet on its value-priced and limited assortment winning over American consumers. Forty million customers flock to their stores every month and go through a relatively bare-bones shopping experience. The charm is all in the rock-bottom prices, which are so low that Aldi regularly beats Walmart at its own low-price game. The German underdog has forced the grocery giants to make vast changes to hold onto its customers. It is true that Amazon and Walmart are dominating the industry, but they cannot ignore the threat Aldi poses.

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