Grocers' Corner

June 24, 2011
| By Pete Daly |
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German no-frills grocery chain Aldi is building a new store at Knapp’s Corner in northeast Grand Rapids, in close proximity to a Meijer supercenter and across East Beltline from a D&W Fresh Market that opened there last year.

This week, Aldi is interviewing potential employees for the store, which David Kapusansky said would open in early September in Celebration Village, on the northwest corner of Knapp Street and East Beltline Avenue.

Construction, managed by Wolverine Construction, was well advanced last week, with brickwork up. An Aldi store typically employs from seven to 12 people, according to papers the company filed with the Grand Rapids Planning Department.

Kapusansky, real estate director of Aldi’s Michigan division, said the store will be 17,800 square feet, noting that “we are much smaller than a standard grocery store.”

By comparison, the Meijer on the other side of Knapp Street is 250,000 square feet, and the D&W Fresh Market, which opened in May last year, is 50,000 square feet.

The Knapp’s Corner Aldi will be the seventh in the greater Grand Rapids area, said Kapusansky. Three are already located on or just off 28th Street in Cascade Township, Kentwood and Wyoming. Others are on 54th Street in Jenison and on Alpine Avenue in Comstock Park.

“We have added 30 stores in the state of Michigan in the last 10 years, and nationally, we’re adding 60 to 80 stores a year,” he said.

Knapp’s Corner “is an area where people do their grocery shopping, which is exactly where we want to be,” said Kapusansky.

As for competing against Meijer and D&W Fresh Market, which is owned by Spartan Stores, Kapusansky said any location where people are buying groceries is a place for Aldi to compete.

“Customers are shopping a variety of sources to get their food,” he said. “We know we won’t get every shopper doing all their business with us, but we provide a healthy opportunity for them to get the value” of what he called “great food” at low prices.

“It takes time for people to learn our brand, but once they do, they gain comfort and they come back more and more often,” said Kapusansky.

“We like to have a simple format where you are going to know exactly where to find your groceries. You’re going to be able to get in and out quickly,” said Kapusansky. “That simplicity is important for the customer and the shopability, but it’s also important for our efficiency — to keep our prices low.”

According to documents filed a year ago with Grand Rapids planners, Aldi carries about 1,400 items, almost all of them sold under the Aldi brand. Selections are limited, in keeping with the corporate goal to keep it simple and efficient.

“So we’re going to have one mayonnaise, one mustard, one ketchup — but we’re going to have a great breadth,” said Kapusansky.

Aldi contracts with a major U.S. food manufacturer to supply its American stores with products packaged in Aldi labels, according to Kapusansky.

Although it concentrates on food and beverages, Aldi also stocks what it calls “special buy” merchandise, offered for a limited time and matching the season. For example, in the spring, special buys may include lawn chairs and gardening equipment.

“We have gotten to the point where we’ve grown enough to be able to go out and source tools” for sale under the Aldi label, he said.

The Business Journal contacted both Meijer and Spartan Stores, requesting an interview regarding Aldi as a potential competitor at Knapp’s Corner. Meijer did not respond, but Jeanne Norcross, vice president of corporate affairs at Spartan Stores, sent an e-mail in response.

“We are celebrating our one-year anniversary at Knapp's Corner and are extremely pleased with our store, our location, and consumer reception. In fact, this D&W Fresh Market enjoys one of our highest consumer satisfaction ratings in our company,” wrote Norcross, adding, “our offer is both unique in its breadth of fresh products, but also in the value we offer on items families use every day. We are very pleased that consumers shop for both our product selection as well as our prices, and promotions.”

There was no mention of Aldi.

The first Aldi — an acronym for Albrecht Discount — was opened in 1961 in Germany by brothers Karl and Theo Albrecht, according to Wikipedia. Karl, who is still living, was ranked 12th on the Forbes 2011 list of the world’s billionaires.

The Aldi chain is active in Europe, the U.S. and Australia, with the first U.S. store opening in Iowa in 1976. Today, there are over 1,000 Aldi stores in 31 states from Kansas to the East Coast.

The Reuters news agency based in Britain reported last week that market research firm Kantar Worldpanel said Aldi and Lidl, another privately held discount grocery chain from Germany, both increased sales by 18 percent over a 12-week period this year, compared to the same period last year. Other grocery firms in Britain experienced a slowdown in sales growth during the same period, indicating that the economy is driving more shoppers to the deep-discount chains.

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