As one of the fastest-growing retailers in the U.S., Aldi is constantly scouting new markets to introduce its unique brand of low-price, high-quality grocery shopping. The German discount supermarket chain has rapidly expanded its American footprint in recent years and now operates over 2,000 stores across 37 states. But so far, New Mexico remains an Aldi-free zone, leaving many shoppers in the Land of Enchantment wondering if and when the retailer might arrive in their neck of the woods.
Albuquerque in particular seems like a prime candidate for Aldi‘s next wave of store openings. With a metropolitan population approaching 1 million and a grocery sector that experts say is ripe for a shakeup, the Duke City could be an attractive target as Aldi charts its Southwestern expansion. Let‘s take a closer look at the factors that could bring Aldi to New Mexico and where they might set up shop.
Aldi‘s Ambitious U.S. Growth Plans
To predict Aldi‘s next moves, it‘s essential to understand the company‘s larger strategic goals. Aldi is currently in the midst of an aggressive coast-to-coast expansion, with plans to become the third-largest grocery retailer in the U.S. by store count by the end of 2022. In 2017, the company launched a $5 billion growth initiative to reach 2,500 total U.S. stores by 2022.[^1] While slightly behind that original timeline, Aldi has still been rapidly expanding at a rate of more than 100 new stores per year.
Geographically, much of Aldi‘s recent growth has been concentrated in the Gulf Coast states and the Southwest. The company has invested heavily in places like Texas, Louisiana, Alabama, and Florida, putting over $500 million into new stores and distribution centers in those states.[^2] Notably, Aldi has also recently planted its flag in Arizona, opening its first four stores in the Phoenix area with plans for at least a dozen more locations in the state.[^3]
This Southwestern trajectory is a major reason why many industry watchers believe New Mexico is a logical next step for Aldi. "The Southwest is the most significant area of opportunity for Aldi in the U.S. based on their current footprint," explains real estate consultant David Livingston. "After building out Arizona, New Mexico would be the next piece of the puzzle." Indeed, with successful stores already established in neighboring states, Aldi has the logistical foundation in place to make a New Mexico expansion more feasible and cost-effective.
The Case for Aldi in Albuquerque
At a more granular level, the Albuquerque market checks a lot of boxes for Aldi‘s store location criteria. With a city population of over 550,000 and a metro area population nearing 1 million, Albuquerque offers the population density and customer base that Aldi targets for new store openings. Demographically, Albuquerque‘s residents match up well with Aldi‘s core shoppers, who tend to be younger, well-educated, and value-oriented.[^4]
Economically, Albuquerque and New Mexico as a whole are on an upward trajectory after recovering from the Great Recession. The state‘s GDP has grown steadily at a rate of about 2.1% annually since 2016, and Albuquerque‘s unemployment rate of 4.2% is in line with the national average.[^5] While not booming like some larger metros, Albuquerque‘s economy appears stable and growing.
The city‘s grocery market is also evolving in ways that could be favorable for Aldi‘s entrance. "Albuquerque has a diverse grocery sector but lacks some of the intense competition and saturation of markets like Phoenix or Dallas," notes Livingston. The city‘s major players include Kroger-owned Smith‘s, Albertsons, Walmart, and Sprouts. But with a more fragmented market and the recent closures of long-time local grocers like Raley‘s and Keller‘s Farm Stores, there is an opening for Aldi to capture value-conscious shoppers with its low-price model.
Real estate conditions could also be advantageous for Aldi in Albuquerque. The average retail rent per square foot in Albuquerque is $16.20, which is below the national average of $18.05.[^6] And with a number of empty big box stores and ample retail construction in high-growth areas of the city like the Westside and Rio Rancho, Aldi should have plenty of options to secure sites in its preferred size range of 12,000 to 15,000 square feet.
Potential Locations for Aldi Stores in Albuquerque
So if Aldi does decide to enter the Albuquerque market, where might it choose to open its first stores? Based on the company‘s strategic approach and my knowledge of the local retail landscape, here are some areas and intersections I believe would be at the top of Aldi‘s list:
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Coors Blvd & Paseo del Norte: In the heart of Albuquerque‘s booming Westside, this high-traffic intersection features a variety of newer retail developments and a strong mix of residential and commercial activity. A former Hastings shopping center here could be a prime retrofit opportunity for Aldi.
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Unser Blvd & McMahon Blvd: Located near the border of Albuquerque and Rio Rancho, this fast-growing area has seen an influx of new homes and retail in recent years to serve its young, active population. With easy access to major arterial roads like Unser and Highway 528, an Aldi store here would be well-positioned to serve shoppers across the metro‘s northwest quadrant.
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Menaul Blvd & San Mateo Blvd: This intersection on Albuquerque‘s Mideast side is centrally located and surrounded by several established neighborhoods in need of more convenient grocery options. With the recent closures of Raley‘s and Keller‘s in this general area, Aldi could find a receptive customer base for its low-price approach.
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Lomas Blvd & Juan Tabo Blvd: Anchoring the growing Eastside of Albuquerque, this major crossroads has seen an uptick in retail activity and multi-family housing development in recent years. A nearby Smith‘s and Walmart Neighborhood Market could provide healthy competition for an Aldi store.
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Coors Blvd & Central Ave: At the gateway to Albuquerque‘s revitalizing Westside, this high-volume intersection is a major commercial hub and thoroughfare for commuters. With an existing Walmart Supercenter and redevelopment projects like the highly anticipated La Esquina @ Coors, this corridor has the traffic and density to support multiple discount grocers.
When evaluating these and other potential sites, Aldi will likely prioritize locations with a sizable residential population within a 3-5 mile radius, high visibility from major roadways, and proximity to complementary co-tenants and community anchors like schools or hospitals. Easy accessibility and ample surface parking are also key factors in Aldi‘s real estate decisions.
Challenges and Timing of a Potential New Mexico Launch
Despite the attractive market fundamentals, there are still significant obstacles Aldi would need to overcome to successfully expand into New Mexico. Chief among them are the operational and distribution challenges posed by Albuquerque‘s geographic isolation relative to its other Southwestern locations.
Unlike Texas or Arizona, New Mexico lacks major distribution hubs and interstate routes that Aldi could easily tap into. The nearest Aldi distribution center to Albuquerque is likely the one under construction in Loxley, Alabama, which is over 1,200 miles away. Aldi would need to make sizable investments in local logistics infrastructure to efficiently transport goods and keep its shelves stocked at the low prices customers expect.
New Mexico‘s vast, rugged landscape and far-flung rural population could also complicate Aldi‘s growth plans in other parts of the state beyond Albuquerque. While Las Cruces, Santa Fe, and Farmington offer pockets of density, much of New Mexico is sparsely populated. This could make it harder for Aldi to achieve the economies of scale and market saturation it typically targets.
These factors suggest that an Aldi launch in New Mexico is still likely several years away. The company will probably focus first on building out its presence in Arizona and filling in gaps in its Texas footprint before tackling a new state. Realistically, the earliest Albuquerque could expect to see an Aldi store open would be 2024 or 2025, and even that timeline could get pushed back if economic conditions or Aldi‘s strategic priorities change.
Why New Mexicans Would Welcome Aldi
Challenges aside, I believe most Albuquerque shoppers would embrace Aldi‘s arrival with open arms. The retailer has developed a loyal following across the U.S. for its unique shopping experience, high-quality private label goods, and hard-to-beat prices on staples like milk, eggs, and produce.
In a 2019 survey by Market Force of over 7,000 U.S. shoppers, Aldi beat out competitors like Trader Joe‘s and Walmart for customer satisfaction.[^7] Shoppers praised Aldi for its competitive pricing, easy-to-navigate stores, and fast checkouts. Many also appreciated the company‘s expanding selection of organic, gluten-free, and premium items.
These attributes could resonate well in Albuquerque, where many residents are budget-conscious but also increasingly health-focused. With one in five New Mexicans facing food insecurity, Aldi‘s discount prices on nutritious foods could be a game-changer for local families.[^8] Aldi‘s growing assortment of Southwestern-inspired products like street taco kits and salsa verde could also appeal to Albuquerque palates.
Aldi stores also tend to have a positive economic impact on the communities they serve. The company estimates that each new store creates around 15-25 quality jobs and generates millions in annual sales tax revenue.[^9] Many of the chain‘s stores are also strategically located in underserved areas where access to fresh, affordable food is limited. If Aldi enters the Albuquerque market, local leaders and economic development agencies would be wise to court the retailer to open stores in neighborhoods that could benefit from its low-cost, nutritious offerings.
Alternatives While Albuquerque Waits for Aldi
In the meantime, budget-minded Albuquerque shoppers have other options for low-cost groceries, even if they can‘t fully replicate the Aldi experience. The city has over a dozen Walmart Supercenters and Neighborhood Markets which offer competitive prices on pantry staples and private-label goods. Select dollar stores like Dollar General and Family Dollar are also expanding their grocery sections and produce offerings.
Natural foods lovers can find affordable organics at Sprouts Farmers Market, which has five locations throughout the metro area. And bargain hunters can shop the weekly specials at regional chains like Smith‘s and Albertsons, which still dominate much of the market. While none of these are true one-to-one alternatives to Aldi, they can help fill the gap until the German grocer makes its way to the 505.
Keeping an Eye on Aldi‘s Southwestern Strategy
For now, Aldi‘s New Mexico debut remains purely speculative. But if the company‘s recent track record is any indication, it‘s only a matter of time before the Duke City lands on Aldi‘s expansion radar. With its fast-growing Southwestern footprint, strategic real estate plays, and value-oriented approach, Aldi seems poised to make a splash in Albuquerque in the coming years.
As a retail real estate consultant and Aldi aficionado, I‘ll be closely monitoring the company‘s moves in the region and listening for any news of a potential Land of Enchantment launch. Albuquerque shoppers should too. In a retail landscape increasingly dominated by Amazon and mega-chains, Aldi‘s arrival would be a breath of fresh air and give cost-conscious consumers a new ally in the grocery wars. Here‘s hoping we‘ll all be hoisting a jar of Deutsche Küche pickles in an Albuquerque Aldi sometime soon.
[^1]: Taylor, Kate. "Aldi is overhauling its stores to win the grocery wars." Business Insider. April 11, 2017.[^2]: Tyko, Kelly. "Aldi opening new stores and expanding curbside pickup with Instacart to 500 more locations in 2021." USA Today. February 10, 2021.
[^3]: Sandoval, Joseph. "Discount grocer Aldi opens first Phoenix-area store; 13 more locations planned." Phoenix Business Journal. November 5, 2020.
[^4]: Ladd, Sarah. "This is What the Average Aldi Shopper Looks Like." Taste of Home. January 7, 2020.
[^5]: "Economy at a Glance: New Mexico." U.S. Bureau of Labor Statistics. Retrieved May 23, 2021.
[^6]: "Albuquerque Market Trends." Crexi. Retrieved May 23, 2021.
[^7]: Maynard, Micheline. "Aldi, Trader Joe‘s and Costco Are Retail‘s Big Winners During Covid-19 Pandemic." Forbes. October 3, 2020.
[^8]: "Facts About Hunger in New Mexico." Roadrunner Food Bank. Retrieved May 23, 2021.
[^9]: "ALDI Economic Impact." Aldi Corporate Flyer. Retrieved May 23, 2021.
