Aldi urges suppliers to keep costs low and focus on sustainability

Discount grocer Aldi is urging its suppliers to cut costs and focus on sustainable practices, according to a Reuters story. 

The German grocery chain, which is rapidly expanding in the U.S., told suppliers at its first U.S. supplier summit that it also wants them to bring their operations closer to Aldi locations and increase production of some items like cheese, the Reuters story noted. Aldi also is encouraging suppliers to deliver on time with complete product deliveries.

The grocer told suppliers it would establish new product lines or facilities and more long-term contracts. Aldi also promised to work collaboratively with suppliers on business development, according to the story. 

The directives come at a time of massive expansion for the grocery chain, which primarily sells private label products. Aldi said in March that it plans to open 800 new U.S. locations over the next five years at an estimated cost of $9 billion.

Aldi operated 2,372 U.S. locations as of April 9, the most recent data available from ScrapeHero.com.

The grocer faces growing competition in the private label discount product grocery market from competitors like Walmart, Lidl, Dollar General, and others. 

Walmart launched its discount Bettergoods private label brand in late April that includes more than 300 products, most of which are under $5. Bettergoods is the largest new private label brand Walmart has released in 20 years. 

That followed the release of Target’s discount private label brand Dealworthy in February, which features home goods, electronics, laundry detergent, dish soap, and more. Target also said in February that it plans to expand its up & up private label brand that includes a wide range of products from pet products to personal care and baby items. 

Meanwhile, Kroger’s Smart Way discount private label brand launched in 2022, featuring about 150 products.