ALDI restructures real estate competencies to bolster city expansion

German discount grocer ALDI SÜD is revamping its approach to shop development to simplify its dealings with cities, municipalities and investors, in particular for its city-centre locations.

The discounter, based in Mülheim an der Ruhr, said it was responding to changing conditions on the real estate market to realign its shop development. It said it was looking for additional partners to help its drive to develop its urban downtown expansion. With cities and local councils now more focused on conserving resources and promoting quarter development (Quartiersentwicklung), the emphasis is creating new living space where possible, and improving the liveability of downtown locations.

With online shopping and COVID-related restrictions, food-anchored retail properties are taking on a more important role in helping to revitalise neighbourhoods and promote integration.

According to Jan Riemann, ALDI SÜD's Director of Property Cooperation, "We believe in the city centre - we want to revitalise and develop the city centre to be even closer to our customers. Short distances make shopping easy and reduce traffic congestion in cities." 

"Whether it's apartments above ALDI branches, new office space or diverse retail locations - we can offer ideas and tailor-made utilisation concepts that benefit our partners as much as the infrastructure and the quality of life on site," he says. 

The retailer has created a central contact point (headed by Riemann) for collaboration with new and existing partners, such as drugstores, department stores, shopping centres and investors - while at the same time opening up its own project development offices for Cologne, Frankfurt am Main and Offenbach, Stuttgart and Munich. The idea of these local offices is to develop mixed-use properties at a local level.

"Planning a location with gastronomy, retail and a daycare centre on the roof in the middle of the city is significantly more complex than building a stand-alone branch in the countryside," says Riemann. "That's why we bundle our expertise."

"As advisors and idea developers, we want - together with our partners - to develop properties that meet urban development requirements and create added value for all users. Whether as investor, owner, tenant or landlord - what matters for us is the long-term perspective, and for that the focus is on flexible development with the right mix of users."

ALDI is already much further along the path of home grocery delivery in the UK, Australia and the USA than it is in its home market. But that's about to change, driven by the pandemic which is rapidly changing German shopping habits, including online grocery buying. 

Earlier this year ALDI SÜD and sister company ALDI Nord announced plans for a major broadening of their online offerings in Germany and the founding of a new joint operating company, Aldi E-Commerce Verwaltungs GmbH, to additionally offer the kind of non-food products that would never normally fit in a regular ALDI shop, such as greenhouses and air purification systems.