Aldi, the German discount grocery chain with a cult following, has taken the U.S. by storm since its arrival in 1976. With over 2,000 stores across 38 states, Aldi has quietly become a major player in the American supermarket landscape.
But for Colorado shoppers, the question remains: why isn‘t Aldi here yet? As a retail industry analyst and devoted Aldi fan, I‘ve spent countless hours studying the company‘s growth strategy and the unique challenges of the Colorado market.
In this in-depth article, I‘ll share my expert insights on why Aldi has yet to make the leap into the Centennial State, along with some data-driven predictions on what the future may hold. Picky shoppers and bargain hunters, read on!
Aldi‘s Slow and Steady U.S. Takeover
To understand why Aldi isn‘t in Colorado (yet), it helps to zoom out and look at the bigger picture of the company‘s U.S. expansion. Since opening its first American store in Iowa 45 years ago, Aldi has followed a methodical, region-by-region growth strategy.
Rather than blanketing the country with stores right away, Aldi takes a more surgical approach, carefully selecting markets where it believes it can build a strong customer base and efficient supply chain. This gradual expansion has allowed Aldi to maintain its low-cost business model and competitive edge.
Just how fast has Aldi been growing? Let‘s look at the numbers:
| Year | Number of U.S. Stores |
|---|---|
| 1976 | 1 |
| 1990 | 200 |
| 2000 | 500 |
| 2010 | 1,135 |
| 2020 | 2,000+ |
Source: Aldi Corporate Website
As you can see, Aldi‘s store count has doubled roughly every decade, with an acceleration in recent years. The company now has a presence in 38 states, with a heavy concentration in the Midwest and Southeast.
Aldi‘s sales have grown even faster than its store footprint. The company generated an estimated $18.8 billion in U.S. revenue in 2020, up from just $1.5 billion in 2010, according to Progressive Grocer. That represents a compound annual growth rate of nearly 30% over the past decade.
Why Colorado Hasn‘t Made the Cut (So Far)
So with all this impressive growth, why has Aldi seemingly skipped over Colorado? As a state with a booming population and a reputation for natural and organic foods, the Centennial State may seem like a natural fit for Aldi‘s value-oriented model.
However, Colorado presents some unique challenges that have likely given Aldi pause. Here are a few key factors that may be keeping the company at bay:
1. Stiff Competition
Colorado is home to several well-established grocery chains that have a loyal customer base and strong brand recognition. According to data from Chain Store Guide, the top players in the state‘s grocery market are:
| Rank | Chain | Market Share |
|---|---|---|
| 1 | King Soopers (Kroger) | 34.6% |
| 2 | Safeway | 21.1% |
| 3 | Walmart | 14.8% |
| 4 | Costco | 6.1% |
| 5 | Whole Foods | 4.3% |
Source: Chain Store Guide, 2021
As you can see, King Soopers and Safeway together control over half of the grocery market in Colorado. These chains have deep roots in the state and have tailored their product selection and store formats to local tastes.
In addition to the big national chains, Colorado has a thriving network of independent grocers, natural food stores, and farmers markets. These smaller players cater to the state‘s health-conscious consumers and often feature locally sourced products.
For Aldi, breaking into this competitive landscape would require a significant investment in brand marketing and store development. The company may be hesitant to take on that risk without a clear path to profitability.
2. Rocky Mountain Real Estate
Another potential hurdle for Aldi in Colorado is the cost and availability of real estate. Aldi has a very specific site selection criteria for its stores, typically favoring locations with the following characteristics:
- 15,000-20,000 square feet of retail space
- 85-100 dedicated parking spaces
- 35,000+ residents within a 3-mile radius
- Traffic count of 20,000+ vehicles per day
- Easy access and visibility from major roadways
While Colorado‘s Front Range urban corridor has plenty of locations that fit this bill, the cost of real estate in cities like Denver, Boulder, and Fort Collins is significantly higher than in Aldi‘s core Midwestern and Southern markets.
According to data from CoStar Group, the average asking rent for retail space in the Denver metro area was $19.36 per square foot in Q1 2021, compared to just $12.58 in Indianapolis and $14.31 in Atlanta, two of Aldi‘s most established markets.
The tight real estate market in Colorado‘s major cities, combined with zoning restrictions and competition from other retailers, could make it difficult for Aldi to find suitable store locations at a price point that works for its low-cost model.
3. Supply Chain Challenges
Finally, Colorado‘s location in the center of the country could pose some logistical challenges for Aldi‘s highly efficient supply chain. The company relies on a network of regional distribution centers to keep its shelves stocked and its prices low.
However, Colorado is geographically distant from Aldi‘s existing distribution hubs in Texas, Kansas, and other nearby states. The Rocky Mountains also present some unique transportation challenges, such as steep grades, winding roads, and harsh winter weather.
To service stores in Colorado, Aldi would likely need to invest in a new distribution center in the state or find a way to efficiently transport goods from its existing facilities. This added complexity and cost may be a deterrent for the company, at least in the short term.
The Case for Colorado: A Value Hunter‘s Paradise
Despite these challenges, there are plenty of reasons why Aldi should consider expanding to Colorado sooner rather than later. The state‘s growing population and changing demographics make it an attractive market for value-oriented retailers like Aldi.
According to data from the U.S. Census Bureau, Colorado was the sixth fastest-growing state in the country between 2010 and 2020, with a population increase of 14.8%. The state‘s population now stands at over 5.7 million, with the majority of residents concentrated in the Denver metro area.
This population boom has been fueled in part by an influx of young professionals, families, and retirees who are attracted to Colorado‘s outdoor lifestyle, strong job market, and relatively affordable cost of living. These consumers are often looking for ways to stretch their grocery budget without sacrificing quality or variety.
Aldi‘s no-frills shopping experience and focus on private-label products could be a perfect fit for these value-conscious shoppers. In fact, a 2019 survey by the National Retail Federation found that Aldi was the most-loved grocery store among millennials, with 64% of respondents saying they would shop there.
Colorado‘s thriving natural and organic food scene could also be an opportunity for Aldi to showcase its growing selection of healthy and sustainable products. The chain has been expanding its "Good & Gather" line of natural and organic items, which now includes over 600 products.
According to the Colorado Department of Agriculture, the state‘s organic food sales totaled over $280 million in 2019, representing a significant market opportunity for retailers like Aldi.
Where Could Aldi Thrive in Colorado?
So if Aldi does decide to take the leap into the Colorado market, where might we see the first stores pop up? Based on my analysis of the state‘s population centers, real estate market, and retail landscape, here are a few potential locations:
Denver Metro Area
With a population of over 3 million, the Denver metro area is the logical starting point for Aldi‘s Colorado expansion. The city‘s diverse neighborhoods and suburbs offer a range of options for store locations, from high-traffic shopping centers to up-and-coming urban districts.
One potential spot for an Aldi store is the Sloan‘s Lake neighborhood in west Denver. This area has seen significant residential and commercial development in recent years, with several new apartment complexes and mixed-use projects in the works.
The neighborhood‘s demographics are also a good fit for Aldi, with a mix of young professionals, families, and empty nesters who are looking for convenient and affordable grocery options. According to data from the U.S. Census Bureau, the median household income in Sloan‘s Lake is $68,000, which is slightly below the citywide median of $72,000.
Another possible location for Aldi in the Denver area is the suburb of Littleton, which has a population of over 48,000 and a median household income of $80,000. The city‘s historic downtown district has several shopping centers with vacant retail space that could be a good fit for an Aldi store.
Colorado Springs
As the state‘s second-largest city with a population of over 478,000, Colorado Springs is another attractive market for Aldi. The city‘s strong military presence and growing aerospace and defense industries have helped fuel population and economic growth in recent years.
One potential location for an Aldi store in Colorado Springs is the Powers corridor on the city‘s east side. This area has seen significant retail development in recent years, with several new shopping centers and big-box stores opening up.
The Powers corridor is also home to a large concentration of military families and veterans, who may be particularly receptive to Aldi‘s value-oriented approach. According to data from the U.S. Department of Veterans Affairs, El Paso County (which includes Colorado Springs) has the second-highest number of veterans in the state, with over 98,000 former service members calling the area home.
Fort Collins
Finally, the college town of Fort Collins in northern Colorado could be a promising market for Aldi. With a population of over 170,000 and a median household income of $62,000, Fort Collins has a mix of students, young professionals, and families who are looking for affordable grocery options.
One potential location for an Aldi store in Fort Collins is the Midtown area along College Avenue. This corridor has seen significant redevelopment in recent years, with several new mixed-use projects and retail centers in the works.
The Midtown area is also home to several large employers, including Colorado State University and the Poudre Valley Hospital system, which could provide a built-in customer base for an Aldi store.
What Can Colorado Shoppers Do to Bring Aldi to Their State?
While the decision to expand to Colorado ultimately lies with Aldi‘s corporate team, there are a few things that local shoppers can do to make their voices heard and potentially influence the company‘s plans.
One idea is to start a grassroots campaign on social media and other online platforms to show Aldi the level of demand for its stores in Colorado. Shoppers could use hashtags like #AldiComeToColorado or #ColoradoNeedsAldi to share their love for the brand and why they think it would be a good fit for their state.
Another tactic is to reach out to local elected officials and economic development organizations to encourage them to court Aldi as a potential new retailer for their community. These groups may be able to offer incentives like tax breaks or streamlined permitting processes to make Colorado a more attractive destination for the company.
Finally, shoppers can continue to support Aldi stores in neighboring states like Kansas, Nebraska, and Wyoming, which could help demonstrate the brand‘s potential in the Rocky Mountain region.
The Bottom Line: Don‘t Give Up on Aldi, Colorado
While Aldi may not have immediate plans to open stores in Colorado, the state‘s growing population, changing demographics, and appetite for value make it an intriguing market for the future.
As Aldi continues to expand its U.S. footprint and build out its supply chain, Colorado could become a more attractive and feasible option for the company. In the meantime, local shoppers can continue to advocate for the brand and show their enthusiasm for bringing Aldi to the Centennial State.
As a retail industry analyst and Aldi aficionado, I‘ll be closely watching the company‘s moves in the coming years to see if and when it decides to take the plunge into Colorado. Until then, I‘ll be dreaming of the day when I can stock up on Aldi‘s famous $0.25 avocados and $2.89 wine in my own backyard.
