Aldi’s new distribution center underscores its commitment to regional expansion

Aldi’s been on a roll in terms of store openings, and now’s the time to strike while the iron’s hot. The grocery chain has opened a new distribution and headquarters in Loxley, Alabama, which will serve 100 stores across the Gulf Coast.

The 564,000-square-foot facility is equipped to service stores in Louisiana, Alabama, Mississippi, and the Florida Panhandle. In total, the 100 stores that will be supported by the Loxley facility represent an opportunity to reach more than 8 million customers. The new distribution center reflects Aldi’s expansion ambitions to add to its 2,300-store count in 38 states and Washington, DC.

• “Our expansion across the Gulf Coast area, made possible by the Loxley facility, allows us to offer our affordable prices to an even greater number of customers,”  Heather Moore, Aldi’s divisional vice president for the Loxley region, told Retail Brew. “This comes at a critical time, as consumers are trying to save money wherever they can.”

Open for business: In 2022, Aldi led the pack among all grocers when it came to store openings at 49, according to a JLL report. The Loxley facility is Aldi’s sixth distribution center in the South, and the company now operates 30 stores in the Gulf Coast—20 of which opened last year. It plans another 13 in the Gulf Coast region in 2023.

• The facility was also built with roof-mounted solar panels, LED lighting, and an environmentally friendly refrigeration system and metal panel insulation.

“We look at many factors when it comes to selecting warehouse locations, and Loxley was a natural fit,” Moore said. “The location has prime access to Interstate 10 and Alabama SR 59, allowing for easier accessibility to our stores.”

Priced in: Aldi has an extremely loyal customer base in the areas it serves because of its low prices. The company has ranked as the most price-friendly in the six years of the Dunnhumby retailer preference index. In that report, which Retail Brew covered, Aldi came in at No. 12 overall.

“Aldi is great at best prices, but that combination of promotions and other levers…are pretty exceptional,” Erich Kahner, director of competitive strategy and insights at Dunnhumby, previously told Retail Brew. “They’re the ones that demonstrate that, even more than H-E-B, it’s possible for a tiny regional [chain] to hang in there and really excel.”

Aldi has recently invested in its digital infrastructure at its brick-and-mortar locations. The chain previously worked with Instacart to handle its e-commerce, but now has been working with Spryker, a German technology company, on an online grocery ordering system.

• “From our unique business model rooted in simplicity and efficiency to our…store layouts, everything about Aldi is designed to provide customers with the best grocery shopping experience,” Moore said. “We look at every part of our business to create savings we can pass on to our customers.”

The regional expansion in the Gulf Coast is evidence that Aldi’s business model works almost anywhere in the country, Moore said. By the end of 2023, Aldi is on pace to be the third-largest grocer by store count in the United States.