Aldi Takes Discount Battle to America’s Biggest Supermarkets with $4 Almond Butter

Hidden beneath a luxury apartment building in Manhattan, Aldi’s newest US store is proving that bargain hunting can thrive even in one of the world’s most expensive neighbourhoods.

For shoppers like 79-year-old Mary Porter, the attraction was immediate. A jar of almond butter selling for just $4 stood out in particular because the same product costs about $22 where she usually shops.

“Aldi has the reputation for being inexpensive, so I thought I would come and check it out, and by golly, it is amazing,” Porter told the BBC as she filled her basket with fresh spinach, organic raspberries and other groceries.

The supermarket, tucked away beneath The Ellery luxury apartment complex where rents begin at nearly $5,000 a month, is almost invisible from street level. Even the building’s website omits Aldi from its list of neighbourhood attractions, instead highlighting premium retailers such as Whole Foods and Brooklyn Fare.

Inside, however, the atmosphere tells a different story. The store is packed with shoppers navigating narrow aisles, suggesting that affordability continues to draw crowds regardless of postcode.

A $9 billion expansion strategy

The Manhattan outlet forms part of Aldi’s ambitious $9 billion expansion plan across the United States, where the German retailer intends to open 800 new stores over five years.

The strategy marks a shift for a company long associated with suburban locations and value-conscious shoppers. Having entered the US market in 1976, Aldi now operates nearly 2,800 stores nationwide and is increasingly targeting densely populated urban centres.

The approach echoes the retailer’s rise in the United Kingdom during the 1990s, when it disrupted the dominance of established supermarket chains by offering quality products at significantly lower prices.

Alongside Lidl, Aldi steadily captured market share from traditional giants including Tesco, Sainsbury’s, Asda and Morrisons. Today, it ranks as Britain’s fourth-largest supermarket, controlling 10.8% of the grocery market.

Its growth accelerated further during the cost-of-living crisis as consumers increasingly prioritised affordability without sacrificing quality.

Winning wealthier shoppers

Although Aldi remains a relatively small player in the US grocery sector, analysts say its strategy is proving effective.

The retailer currently accounts for just 2.9% of America’s grocery market, compared with Walmart’s dominant 20% share.

Rather than competing directly on scale, Aldi is attracting middle- and higher-income households that are looking to reduce spending after years of inflation.

According to location analytics company Placer.ai, many shoppers earning between $75,000 and $125,000 annually have started making Aldi a regular stop.

“Those shoppers have started to trade off a visit to a conventional grocery store or a quick service restaurant and started to go into Aldi more frequently,” said RJ Hottovy, Placer.ai’s Head of Analytical Research. “They’re looking for ways to stretch their household budget.”

Convenience is also helping the chain attract office workers.

Kelvin Dozier, who previously shopped at an Aldi store in Brooklyn, now visits the Manhattan branch because it is located close to his workplace.

“The one here – it’s brighter,” Dozier said while shopping for sweet navel oranges. “The one in Brooklyn is a little smaller. It almost seems temporary, but here it looks like a permanent location.”

Winning converts, but not everyone

Not every shopper is ready to abandon rival supermarkets.

First-time customer Ralph Montenegro praised Aldi’s pricing on everyday essentials but remained unconvinced about switching completely.

“It has more variety than say Target,” he said, while adding that he still prefers Trader Joe’s because of its wider range of natural and organic products. He also pointed to Aldi’s heavy emphasis on private-label packaged foods as a drawback.

That limited product selection is deliberate, according to Dustin York, Associate Professor of Communication at Maryville University.

He explained that Aldi operates a highly efficient model by stocking roughly 80% of the products offered by traditional supermarkets while significantly reducing operating costs.

York believes Aldi is unlikely to dramatically erode Walmart’s dominance.

“I call Walmart the battleship, and I call Aldi a kind of submarine,” he said.

Manhattan comes with a price

Operating in New York City presents its own challenges.

“Their biggest kryptonite is real estate cost,” York warned, noting that commercial rents in Manhattan typically range between $350 and $700 per square foot.

Supplying the store is equally complex.

Speaking on Bloomberg’s Odd Lots podcast, Aldi US Chief Commercial Officer Scott Patton revealed that inventory is transported overnight from South Windsor, Connecticut, using specially designed shorter trucks capable of navigating Manhattan’s narrow streets.

“We come at night because of the congestion,” Patton explained.

Each delivery requires a two-person driving team, with one driver monitoring blind spots while the other unloads goods. To keep shelves stocked, Aldi dispatches between three and four deliveries every night.

Patton described the operation as a “logistical symphony.”

The Walmart challenge

Despite Aldi’s rapid expansion, industry experts believe overtaking Walmart remains unlikely.

Retail analyst Jerry Sheldon says Walmart enjoys financial advantages that few competitors can match.

“The reason Aldi cannot simply out-discount its way to the throne is that Walmart fights with a war chest and Aldi fights with a scalpel,” Sheldon said.

He noted that Walmart invests more than $20 billion annually in technology, automation and supply chain improvements, while also generating billions of dollars through advertising and membership programmes.

“Aldi is a brilliant single-purpose machine, while Walmart is a money machine that happens to sell groceries cheaply. That gap is the whole ballgame,” he added.

Affordable groceries remain the biggest attraction

For shoppers like Mary Porter, however, corporate rivalry matters far less than the savings.

With grocery prices remaining high across the United States, Aldi’s promise of quality products at significantly lower prices is proving enough to win loyal customers—even if they have to travel into the basement of a luxury apartment building to find them.

“I get on the subway with my big bag and go home with my cheap groceries. I mean, I’m so happy. This is amazing,” Porter said.