A price war between discount grocers Walmart and Aldi is spreading across the country and could soon roil the Twin Cities food market.
For years, Walmart watched Aldi stores locate near its own stores and sometimes, as in Roseville earlier this month, right next door.
And last week, Germany-based Aldi said it would spend $5 billion to build 900 new stores and remodel more than 1,300 others as it aims to become the third-largest grocer in the U.S., after Walmart and Kroger. In the Twin Cities, Aldi will spend $34 million to remodel 28 of its 35 stores between now and 2019.
Aldi’s expansion was just part of a newsy week in the U.S. grocery industry. Another German-based discounter, Lidl, began opening its first U.S. stores too. Meanwhile, Kroger forecast an earnings miss that sent its stock plunging to its worst single-day drop in 17 years. And on Friday came the biggest news of the week: Amazon.com Inc.’s $13.7 billion purchase of Whole Foods Markets Inc., the biggest sign yet that the online giant is moving deeply into brick-and-mortar retailing.
Until recently, Walmart didn’t appear to take Aldi’s invasion too seriously, even as Aldi was boasting that its private-label products were about 20 percent less expensive than Walmart’s store-branded items.
But in February, Walmart started going head-to-head with Aldi by cutting prices in markets in 11 states, including Iowa. Walmart intends to undercut Aldi and other rivals by 15 percent and is spending $6 billion to solidify its reputation as the low-price leader.
Aldi: 28 of 35 Twin Cities stores will be remodeled by 2019. Two to four new metro stores will be added per year through 2020. Outstate stores in Northfield, Duluth, Moorhead and Red Wing will open this year.
Co-ops: Valley Natural Foods in Burnsville will start a large expansion in the fall. North Market (a nonprofit) and Wirth Cooperative will open later this year in north Minneapolis.
Cub Foods: Brooklyn Park (two locations) and Champlin were just remodeled. Apple Valley, Cottage Grove and Eagan are being remodeled.
Fresh Thyme: A new St. Louis Park store opens in the fall. Two or three new stores are expected in 2018.
Hy-Vee: Cottage Grove opens in August, Shakopee in the fall. In 2018 or later, stores in Farmington, Maple Grove (two locations), Columbia Heights (two locations), Robbinsdale and Chaska are scheduled to open.
Kowalski’s: The Hennepin Av. store is being remodeled and expanded. Will be completed by mid-October.
Target: New small-format store will open in Uptown in October. Major renovations are in progress in downtown Minneapolis, St. Paul Midway and St. Louis Park near Hwy. 100.
Trader Joe’s: A new store on Washington Av. near downtown Minneapolis will open in 2018.
Walmart: Vadnais Heights, Eagan, Inver Grove Heights, Maple Grove and Forest Lake are remodeled or in process.
“We continuously look for ways to drive down costs and deliver those savings to our customers because we believe they shouldn’t have to trade down or sacrifice quality to save money,” said Anne Hatfield, Walmart’s director of communications. “That’s why we’re giving customers in select markets even lower prices on the national and private-label brands.”
Across the country, the expansion of low-price grocers shows…