My first reaction when I heard Kohl's chose Aldi – ALDI – as a grocery option to help “right size” its footprint went something like this:
But after I started thinking about it, and ran the idea past a few friends, it really started to make sense.
NOBODY I know (me included) shops at Kohl's without a coupon.
Ever.
And I'm not talking the 15% off they occasionally dangle. I'm walking in there with at least 20%, and most often 30%, and I check the clearance rack first, folks.
Kohl's has trained an entire customer base – with a few exceptions – to feel like they're getting a great deal by marking up their regular prices and having almost too-frequent sales, coupons, Kohl's Cash and Black Friday specials that are just plain ridiculous.
This is perfect for Aldi.
Why?
It's because Kohl's also carries decent quality name brands, and Aldi wants that discount-seeking “premium” buyer.
Aldi is no longer just going after low income need-based shoppers. It seems callous to write this, but that's more Dollar General's niche now, and I'm saying this as someone who grew up poor in rural Missouri. I used to buy my jeans at Dollar General.
Have you seen the store design in an Aldi lately?
It maybe isn't premium, but it's at least nice, with vibrant signage and those “treasure hunt” kind of specials like premium cured meats, European specialties and name brands like Butterball turkeys at Thanksgiving. Aldi has its own brand of organic salad mix.
Especially in areas where Aldi may not be a familiar name for shoppers, co-locating with a Kohl's will help introduce the brand. For Kohl's, Aldi will bring much-needed foot traffic.
You can go on their website and use any number of browser add-ons and get your 30% off coupon, plus at least a 3% rebate, just about every day. Going to the store is no longer necessary.
I have no concerns about the logistics and store design. Aldi, and its German cousin Lidl, is familiar with locating within other retail space, like a mall or a shared storefront. Most of the European Aldi and Lidl stores I've visited have been a situation like this. They'll figure it out.
And I've also heard that Kohl's is leaving the door open to partnering with other retailers. This could be a great fit for just about any other pure grocery small format, like a Trader Joe's, Fresh Market or even…Whole Foods.
Amazon has a toe in the door with Kohl's, with a pilot program allowing Amazon shoppers to do returns at Kohl's in select markets.
It only makes sense that this relationship could expand to Whole Foods where the market is right.