2010 Power 50: No. 7 Charles Youngstrom

Charles Youngstrom, co-president of Aldi U.S., prefers to keep a low profile and let the stores he oversees do his talking.

Along with Co-President Jason Hart, he led the limited-assortment chain into Texas earlier this year — following a major entry into Florida in 2008 — and has New York City in his sights for next year.

A third co-president, Vern Frazier, retired a year ago.

With sales approaching an estimated $7 billion, Aldi, based in Batavia, Ill., operates 1,100-plus stores in 31 states, including every state east of the Rockies except Maine, New Hampshire and Louisiana. Aldi, like Trader Joe’s Market, Monrovia, Calif., is wholly owned by the Albrecht family of Germany, although the two U.S. companies operate as completely separate entities.

Aldi opened 100 new stores in each of the last two years and is on track to open 100 more this year, with plans for another 80 to 100 new locations in 2011, the company said.

One of the new stores scheduled to open next year will be in the borough of Queens in New York City — a store originally slated to debut this year that was postponed till 2011.

According to Dave Marcotte, director of retail insights for Kantar Retail, Cambridge, Mass., “The question is, with all its stores fitting an identical physical model, can Aldi operate an urban model?”

Finding the space for its 10,000-square-foot model may be an issue in New York, he said, adding he has no doubt Aldi will be successful there. “It should have been there years ago,” he noted.

Over the last couple of years, Aldi as been consolidating private brands from 123 down to 88, “to make our brands as recognizable to customers as possible,” a chain spokeswoman told SN. “Our new packaging includes crisp photography, better illustrations, more ‘call-out’ boxes and a more consistent look, all of which lead to better brand recognition.”

Since late 2009, the chain has been running an identical series of TV and radio commercials in expansion markets to introduce itself to potential customers, built around the tagline, “Honest-to-goodness savings.” The spots, which start after Aldi establishes a base of stores in an area, are running in new markets in the Northeast and Southeast, as well as in Texas, the spokeswoman said.

“One of Aldi’s problems in entering a new market is that no one has ever heard of it and it’s a mystery to most consumers,” Marcotte pointed out. “So as the company opens stores in new areas, it’s been running small media campaigns that are very well done that say, ‘Here we are, we have really nice stores and very low prices.’”

The three spots, which feature a soft-spoken announcer, reflect a very soft sell:

• One commercial lets potential shoppers know that Aldi offers “low, low unbelievably low prices.”

• A second spot explains that Aldi is not a club — “If you like saving money, you’re in the club,” it says — nor is it a supercenter, “where you spend a lot of time searching for a single item.”

• The third spot says other stores offer some low prices some of the time, whereas Aldi has “the lowest prices on everything all the time.”

In some of Aldi’s more well-established markets the chain has been running print ads that tend to promote in-and-out general merchandise items, including some summer items — like awnings, chairs and mulch — “that I haven’t seen it promote before,” Marcotte added.