Aldi to expand U.S. headquarters in Batavia

Aldi, known for its low prices and small stores, announced plans Tuesday to add another building to its Batavia headquarters.

The discount grocer plans to expand on its existing 56-acre campus off Kirk Road that houses two connected office buildings and a warehouse.

"The expansion is going to enable us to support the rapid growth we've experienced in the past year as well as future growth," Jason Hart, president of Aldi U.S. said Tuesday.

The 80,000-square-foot addition will house more test kitchens, as well as space for growth in buying and product quality areas, Hart added.

"We're over capacity at our headquarters," Hart said.

About 400 employees work at the 110,000-square-foot two-building facility in Batavia. Hart would not say how many jobs will be added with the expansion expected to be complete in 2011.

The recession has driven cash-strapped consumers to the grocer known for its low prices.

Aldi is responding with new stores. The retailer opened more than 200 stores over the past three years, Hart said. Another 100 stores are planned for 2110 with a push into the Dallas, Fort Worth market. The company operates about 1,050 stores that are generally much smaller than traditional grocery retailers.

Aldi plans to open about 10 stores this year in Chicago and the suburbs, including at 451 N. Randall Road in Batavia and in Naperville at 1460 Naperville Wheaton Road.

Aldi's growth is no surprise to retail experts.

Aldi has overcome image stereotypes, said Bill Bishop, a food retailing consultant at Willard Bishop Consulting in Barrington.

In the past, Aldi mainly attracted lower-income families desperate to save money. The recession, brighter stores and new merchandise packaging have all helped bring in more upscale shoppers.

Instead of offering shelves and shelves of a particular product, Aldi mainly offers its own brand. All products in the Aldi Select line go through intense testing, Hart said.

"They have very low pricing on high-quality private labels," Bishop said.

The savings are real, Bishop says, with prices about 20 percent lower than at a traditional grocery store. "It's not nickels and dimes. The impact can be quite material," he added.

Aldi came to Batavia and the U.S. in 1976 hoping to duplicate a business model that proved successful in Europe. With U.S. food inflation then in the double digits, the company's timing was good.

Aldi was one of the first no-frills grocery stores that featured rock-bottom pricing by offering a limited inventory and squeezing out all unnecessary costs, from coupons to bakeries to grocery bags.

The current recession has brought in a whole new group of shoppers looking to save money, Bishop said.

To help with this goal, the chain has added to its inventory with a healthier selection and expanded assortment.

"Shoppers can now find 90 percent of the items they need at Aldi," he added.