Case Study: ALDI Grocery Stores

2021 – Gilbert & Peoria, AZ

Ground Up Construction

About ALDI

Founded in 1976, ALDI is a family-owned discount supermarket chain headquartered in Batavia, Illinois. ALDI is a subsidiary of its parent company ALDI Süd, which is based in Germany.¹

Although a staple in the Midwest and East Coast of the United States since opening its first store in Iowa in 1976, ALDI had only recently begun to eye the West Coast and Southwest as of the mid-2010s.²

In 2016, ALDI began opening stores rapidly in Southern California, opening its first eight in just a single year. This market was chosen partly due to its sister company Trader Joe’s being based in California.³

Upon their success in California, ALDI then began planning to expand heavily into the rapidly-growing Arizona market. ALDI’s first four Arizona stores were scheduled to open in late 2020. The construction of two of these first locations, Gilbert and Peoria, were managed by Delta Construction.⁴

ALDI’s Gilbert store, located at 1801 E Pecos Rd, Gilbert, AZ 85295, was notable for being one of ALDI’s largest stores, at around 22,000 square feet, as ALDIs are typically smaller and compact facilities.⁵

ALDI’s Business Goals in Arizona

ALDI poised themselves to enter the Arizona grocery market and rapidly disrupt the establishment. As of 2019, two grocery chains accounted for 57%, or nearly 3 out of every 5 grocery stores in the Phoenix market:⁶

40% – Fry’s Food & Drug Store (Kroger)
17% – Safeway

ALDI’s AZ expansion plans were so aggressive they aspired to become the state’s 3rd-largest grocer by the end of 2022 by number of stores, in just two short years, aiming to cut heavily into the market shares of Fry’s and Safeway.⁴

aldi grocery gilbert ground up construction scaled

Construction Challenges Due to the COVID-19 Pandemic

Due to their quick timeline for expansion, ALDI had a very tight schedule for these two projects. Unfortunately, COVID-19 caused a host of delay obstacles that Delta had to overcome.

Very large supply chain delays and shortages ravaged the nation over the course of the pandemic, especially in mid-2020. Some materials were as much as 6 weeks behind their scheduled delivery dates. Permits were also delayed for both job sites by as much as 3 weeks at times.

Labor shortages, which the Phoenix metro area was already experiencing prior to the pandemic, were exacerbated by the COVID outbreak due to public health concerns. Delta also had to constantly wrestle with ever-changing protocols from rapidly changing information regarding the coronavirus pandemic and how to keep employees safe while working.

As a larger client than most that Delta has worked with, ALDI brought expectations stemming from experience with larger construction contractors that proved unrealistic during the extraordinary circumstances of the COVID-19 pandemic.

ALDI works with an established set of vendors and suppliers, which were required for Delta to utilize exclusively in many cases. This further exacerbated many types of material delays.

Whereas in some cases a larger contractor may be able to throw more resources at a problem, Delta needed to find other solutions to avoid delays and ensure that ALDI’s expectations were met.

How Delta Overcame COVID-19 Delays:
Quality Subcontractor Relationships

Despite the above obstacles, Delta managed to open the Peoria store on time, and the Gilbert store just a few weeks behind schedule. When factoring in the various delays outside of Delta’s control, Delta achieved a heavily-accelerated timeline compared to the initial timeline proposals on both projects.

Delta managed to accomplish most of this schedule recovery due to having very close working relationships with their local subcontractors. Delta was able to negotiate voluntary 6-day and even 7-day work weeks to help make up an impressive amount of lost time due to pandemic-related delays. Those same quality subcontractors also worked closely with Delta to overcome material shortages as permitted by ALDI’s vendors and suppliers.

As the general contractor, Delta expertly managed the project timeline and client relationship with ALDI. This allowed the subcontractors to focus on their intense workloads without additional stress, leading to incredible time being made up on the projects.

Delta is proud to have delivered these two projects as-promised under extraordinary and far-reaching public health circumstances nobody in living memory had encountered before.