With all the “last-mile” chatter about home delivery of online grocery purchases, it is easy to forget how store-based the supermarket industry really is. U.S. supermarkets added more than 17 million square feet of selling space last year, as new store openings grew 30 percent over the previous year, according to an annual study by real estate services firm JLL.
“Grocery is one of the strongest retail sectors, with nearly twice as many new stores opening than closing last year,” says James Cook, director of retail research for JLL. Shoppers now make more frequent trips to the store, making fewer purchases, than they did in the past when there were weekly pantry-filling visits to the supermarket. In response, grocers are building smaller stores, though the trend is not spread evenly around the country, JLL reports; three states — California, Florida and Texas — captured a quarter of the new stores opened in 2018. Busiest of the chains debuting new units were Aldi, H-E-B, Kroger, Publix and Sprouts Farmers Market.
Aldi has been a proponent of small format stores since brothers Karl and Theo Albrecht started the business in Germany before bringing it to the United States in 1976. Last year Aldi opened 82 stores as it moves toward a goal of 2,500 locations within four years and being the country’s third largest grocer after Walmart and Kroger. “They’ve done such a great job with building up a brand allegiance. They’re clearly appealing to the consumer, and it just allows them to expand pretty rapidly across the country,” says Taylor Coyne, JLL’s research manager of U.S. retail. With stores ranging from 10,000 square feet to 12,000 square feet, Aldi floods markets with new stores. “We are seeing significant growth in key markets such as Minnesota, California, Texas, the Carolinas, Georgia and New York,” says Matt Lilla, divisional vice president of Aldi’s Faribault division.