Charles Youngstrom leads a team at Aldi that’s finally making its way to the West Coast.
The Batavia, Ill.-based limited-assortment retailer last month confirmed long-standing speculation by saying it was in negotiations to open a warehouse in Moreno Valley, Calif., a move that would bring the limited assortment discounter to California for the first time.
While many in the industry might wonder what took so long, the message from Youngstrom — an Aldi co-president — is that measured but steady growth is what works for Aldi. The company expects to add 80 stores over the next year — about the same number as the year before, and the year before that … and the year before that.
The company’s latest frontier is Houston, where it is in the midst of a three-year, 30-store, $125 million expansion begun a year ago.
Speculation over a California landing rose to the surface more than a year ago when a job-recruiting website indicated Aldi was looking for potential workers there. More recently, Fresh & Easy’s decision to vacate the U.S. sparked speculation that Aldi might be a buyer for at least some of its locations. Most recently, published reports in California indicated Aldi would invest $55 million to create a West Coast head office and 935,000-square-foot warehouse in Moreno Valley. Construction on the facility could begin later this year with a goal of occupying the facility next summer.
Observers then expect Aldi to proceed with an expansion plan not unlike its recent moves to Dallas and Houston – where Aldi’s tight selections of private-brand goods at eye-popping low prices have already made it a formidable contender for share in those markets.
“Aldi’s challenge is simply to continue to accelerate after expanding too slowly in the 20th century and the first part of the last decade,” maintained Burt P. Flickinger III, managing director of Strategic Resource Group, New York. “But they are doing exceptionally well in the South and as they move toward the Southwest, California and the West Coast, their level of success is going to grow geometrically.”
Youngstrom, though a company spokesperson, told SN he felt the company’s biggest challenge was to continue to successfully introduce its concept and brand to new markets.
“As we continue to grow and enter new markets, our challenge is our greatest opportunity: Sharing our simple and streamlined approach to grocery retailing with new customers,” he said.
Aldi has encouraged trial by backing its items with what it calls a double guarantee: It will replace the item and refund the purchase price for customers who aren’t satisfied. Youngstrom said the guarantee was “key differentiator” in the battle to win new customers
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