Discount Aldi Food Market coming to Arroyo Grande and SLO

Aldi plans to build a new market at the shopping center coming to the corner of Tank Farm Road and Broad Street in San Luis Obispo.
Aldi plans to build a new market at the shopping center coming to the corner of Tank Farm Road and Broad Street in San Luis Obispo.

Fast-growing German grocer Aldi Food Market will open a store in Arroyo Grande in the coming months, its first venture into the Central Coast. And the company also has set its sights on a San Luis Obispo location.

With 57 stores in Southern California, Aldi is moving north, said the company's Central California director of real estate Jeff Luna.

“We expect to have seven to eight stores on the Central Coast,” Luna said, predicting that within a three years, Aldi will open a store in San Luis Obispo, two in Santa Maria, and another in Lompoc, among others.

In Arroyo Grande, Aldi recently signed a lease for the former Cookie Crock space, just under 24,000 square feet at the renovated shopping center at Elm and Grand, which is already home to Rite Aid, Chipotle and Five Guys.

“We expect to open by fall of this year,” Luna said.

Not afraid of competition, Aldi’s new store will be located near Walmart, Food 4 Less and Smart and Final — all selling discount groceries. Vons is a country-block away as well.

Luna added that Aldi is looking at a site in San Luis Obispo at Tank Farm and Broad in a proposed 6-acre shopping center at the northwest corner of the intersection.

According to a real estate brochure and website for Pacifica Commercial Real Estate and SLO’s Rossetti Co., a 20,000-square-foot Aldi would anchor the new 48,000-square-foot shopping center. The center would also have drug store.

The Aldi would compete head to head with Vons across the street in the Marigold Center.

“We’ve signed a letter of intent and expect to get our corporate approval for a lease,” Luna said of the SLO site.

With all-new construction, it is likely San Luis Obispo will not see Aldi open this year.

Asked if this site wouldn't cannibalize business from its sister company — Trader Joe’s on South Higuera Street — Luna explained that Aldi targets different shoppers with an emphasis on offering the basics and rock-bottom prices vs. Trader Joe’s emphasis on specialty products, organics and wine.

Instead, Aldi sees Walmart as a key competitor.

Privately held Aldi and Trader Joe's are owned by Germany’s Albrecht family, with a worldwide store count of more than 10,000 locations. The company expects to have some 2,500 locations in the United States by 2022, making it the nation’s third-largest grocery store by count. Walmart is No. 1.

As it moves north along the coast, Aldi is simultaneously adding stores in the central San Joaquin Valley as far north as Fresno and Clovis, where it will have six stores, and Tulare County, where it plans three stores, along with locations in Hanford and Delano. This will build on stores the company already has open in Bakersfield.

Luna expects Aldi will eventually have 15 to 20 locations in that part of the Valley, with several opening this year as well. Each new store has 15 to 25 employees, Luna said.

Aldi is also expanding into Arizona.

John Lindt is a freelance writer who runs the news website
Related stories from San Luis Obispo Tribune