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More San Diego Stores on Tap for Fast-Growing Aldi

Small-format Grocers Expand Their Push to Boost Local Footprints
July 9, 2018
Discount grocer Aldi has leased space at this retail center on Mira Mesa Boulevard in San Diego.

As small-format chains eat away at traditional supermarket players, fast-growing discount grocer Aldi is poised to expand its San Diego County reach to at least eight stores -- with two future locations leased but not yet formally announced in San Diego and Encinitas.

Data gathered by CoStar Group indicates that German-based Aldi, with U.S. operations headquartered in Illinois, has leased 10,264 square feet at 6755 Mira Mesa Blvd. in San Diego’s Mira Mesa. It will take a spot vacated by the now-defunct grocer Fresh & Easy, with a projected move-in this September.

Also, Aldi is listed among the tenants at 333-335 N. El Camino Real in the North County coastal city of Encinitas, where it is expected to occupy a 33,000-square-foot space that formerly housed a Big Lots store later this year. A renovation of the space is currently undergoing design review by the city, and Aldi’s lease is expected to begin in late November.

With a no-frills format, Aldi during the past five years has expanded significantly on the West Coast. It set up a distribution warehouse in the Riverside County city of Moreno Valley in 2015 and has since opened several Southern California stores, including six locations now operating in San Diego, Vista, Escondido and Chula Vista.

San Diego County has had other smaller-format grocers expand their footprints in recent years. Those include locally based players such as Barons Market and Jimbo’s Naturally, along with Los Angeles-based Smart & Final, Trader Joe’s and Northern California-based Grocery Outlet.

That’s in addition to a growing slate of regional grocers specializing in items geared to Hispanic and Asian communities. Also, big-box players Walmart and Target have been expanding their local grocery offerings through new store openings and expansions of existing stores.

In many cases, the smaller-format grocers took up local space vacated a few months earlier by other retailers. Just recently, for instance, Phoenix-based specialty grocer Sprouts Farmers Market opened a new store not far from the future Aldi on Mira Mesa Boulevard after taking a space vacated in 2016 by Kohl’s to bring its local location count to 23.

Aldi officials could not immediately be reached for comment on its San Diego regional plans. The company last year announced plans for further U.S. expansion that will bring its store total to 2,500 -- about 900 more than it had in 2017 -- by the end of 2022. The company plans to invest $3.4 billion into those expansion efforts.

Aldi also recently began offering online grocery ordering via Instacart in markets including Atlanta, Chicago, Dallas and Los Angeles.

The global grocer Lidl, another Germany-based, no-frills competitor to Aldi, has also been expanding its U.S. presence in recent years, but has so far not landed on the West Coast.

Lou Hirsh, San Diego Market Reporter  CoStar Group   

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