Aldi is coming after Walmart's (WMT) grocery market share, as the German discount retailers said it will invest $3.4 billion to expand its U.S. presence.
The privately held German grocery store said it plans to increase its store base to 2,500 by 2022, the company said Monday. Aldi currently operates 1,600 U.S. stores.
In February, the retailer announced it was investing $1.6 billion in its U.S. stores, with plans to remodel and expand more than 1,300 stores by 2020.
The new openings are expected to create 25,000 jobs over the next five years and make Aldi the third-largest grocery chain operator in the U.S. behind Walmart and Kroger (KR) , serving 100 million customers a month.
The retailer said it was "bucking the trend plaguing many retailers by accelerating its growth of new stores with a total capital investment of $5 billion in new and remodeled stores over the next five years."
Aldi's plan comes as fellow German discounter Lidl is set to open its first 10 stores in the U.S. on Thursday, June 15. Lidl plans to open 200 stores in the coming years. In May, Lidl said it would price products up to 50% lower than rivals.
Aldi for its part also plans to keep prices significantly lower than traditional food retailers.
"We're growing at a time when other retailers are struggling. We are giving our customers what they want, which is more organic produce, antibiotic-free meats and fresh healthier options across the store, all at unmatched prices up to 50 percent lower than traditional grocery stores," ALDI's U.S. CEO Jason Hart said in a statement.
He told Reuters in May the chain intended to have prices at least 21% lower than rivals and would focus on adding in-house brands for price-sensitive customers.
Aldi and Lidl have been known to upset local markets. In the U.K., the low-cost competitors have upset the traditional grocery store market.
Sales at Aldi grew by 19.8% and Lidl racked up an increase of 18.3% in the 12 weeks to May 21, according to data from Kantar Worldpanel, while traditional supermarkets saw sales grow by just 1.6%.
The German chains' rapid growth took their combined market share to a new high of 12%.
Walmart isn't just sitting on the sidelines however, executives are preparing to compete with the German companies, as well as its U.S. peers.
"The work that's been done to be positioned to compete started happening two years ago," Walmart CEO Doug McMillon told the Wall Street Journal in May.
Walmart's shares fell 0.2% to $79.24 at Monday's end.
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