Family budgets are stretched and bargain grocer Aldi seizes the moment in a rapid expansion

Food inflation has slowed, but it was still up 2.4% last year, according to U.S. data, and has soared about 25% since the pandemic. On Tuesday, the U.S. Labor Department said that grocery prices jumped 0.7% in December from the previous month, and that price hikes accelerated faster in 2025 than they had in the previous two years.

Last month beef and veal prices climbed 1% from November, and are up 16.4% from last year. Coffee prices increased 1.9% in a month and are up almost 20% over a year. Egg prices dropped 8.2% in December, continuing to fall after surging last year after a bird flu outbreak.

Aldi has sought to snap up market share as more families trade down, meaning they are changing where they shop to cut costs.

Americans are dropping trusted name brands for cheaper store-brands and swapping out the places they've shopped for years in favor of discount or thrift stores. It's been a boon for national bargain stores chains like Dollar General and Dollar Tree.

That shift had begun before President Donald Trump’s trade war began, but appears to have accelerated over the past year.

Aldi said in 2024 that it planned to open 800 new stores by 2028 as inflation worries spread. It announced plans to open a record 225 locations last year in the U.S.

Aldi said Tuesday that it will add new distribution centers in Florida, Arizona, and Colorado and is still committed to investing $9 billion in the U.S. through 2028. The company is also looking to open more than 50 stores in Colorado within the next five years and plans to double its Las Vegas store count by 2030.

The expansion will give Aldi almost 2,800 stores by the end of the year, which gets its closer to its goal of 3,200 stores by 2028.

Traditional grocers are under pressure from bargain chains, massive retailers like Walmart, and also relatively new players like Amazon.com. In December, Amazon said same-day perishable grocery delivery had been expanded to more than 2,300 cities and towns, and the online giant said it has more expansion plans for this year.