Aldi is looking to outdo Wal-Mart Stores Inc (NYSE:WMT) and other retailers with low prices.
A study conducted by the company has found that it currently offers grocery prices that are 21% lower than its rivals. Aldi CEO Jason Hart says that he plans to continue to keep prices this low in an effort to draw in more customers.
Hart notes that Aldi isn’t interested in using discounts, coupons or rewards programs to draw in customers. Instead, he says that his company will simply offer grocery items for prices that are regularly lower than its rivals.
Harts says that Aldi will be able to do this because it relies off of private label goods. 90% of the products offered by the company are in own in-house brands. In comparison, only 30% of Wal-Mart Stores Inc’s brands are private. Aldi says that it will add more private label goods so it can adjust prices more easily to better compete with its rivals, reports Reuters.
The Aldi CEO says that part of its plan to better compete with other retailers is to remodel its stores. It will spend $1.6 billion to remodel 1,300 locations. This money will also help it open 400 new stores in Florida, Texas and along the East and West Coasts. However, it will have to be careful not to set prices to low, which has caused several bankruptcies in the market recently.
Wal-Mart Stores Inc isn’t the only other retailer that Aldi is trying to overcome. The retailer announced last year that it was expanding its organic food offerings in an effort to better compete against Whole Foods (NASDAQ:WFM).
