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Aldi
operates 1,600 U.S. stores and earlier this year said it would
add another 400 by the end of 2018 and spend $1.6 billion to
remodel 1,300 of them.
The investment, which raises Aldi's capital expenditure to at
least $5 billion so far this year, comes at a time of intense
competition and disruption in the industry.
German rival Lidl will open the first of its 100 U.S. stores on
June 15. In May, Lidl said it would price products up to 50
percent lower than rivals.
Wal-Mart Stores Inc <WMT.N>, the largest U.S. grocer, is testing
lower prices in 11 U.S. states and pushing vendors to undercut
rivals by 15 percent. Wal-Mart, the world's biggest retailer, is
expected to spend about $6 billion to regain its title as the
low-price leader, analysts said.
The furious pace of expansion by Aldi and Lidl is likely to
further disrupt the U.S. grocery market, which has seen 18
bankruptcies since 2014. The two chains are also upending
established UK grocers like Tesco Plc <TSCO.L> and Wal-Mart's UK
arm, ASDA.
In May, Aldi Chief Executive Jason Hart told Reuters the chain
intended to have prices at least 21 percent lower than rivals
and would focus on adding in-house brands to win over
price-sensitive customers.
"We're growing at a time when other retailers are struggling,"
Hart said in a statement. Hart added that Aldi's prices were
also up to 50 percent lower than traditional grocery chains, a
move that appeared to follow rival Lidl's announcement on
prices.
The latest store expansion will create 25,000 U.S. jobs and make
Aldi the third-largest grocery chain operator in the country
behind Wal-Mart and Kroger Co <KR.N>, the German chain said in a
statement. Aldi's 2,500 stores would equal about 53 percent of
Wal-Mart's U.S. outlets.
"As we continue to expand and grow, our purchasing power
continues to increase and allows us to bring products at better
prices for consumers," Scott Patton, Aldi's head of corporate
buying, said in an interview.
(Reporting by Nandita Bose in Chicago; Editing by Richard Chang)
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