Aldi, the Germany-based no-frills supermarket chain, is now accepting credit cards at its U.S. stores as it tries to attract more shoppers.
The step, announced Tuesday, is part of Aldi's strategy to broaden its base beyond low-income customers and make its shopping experience more convenient. It also creates more competition for Wal-Mart, Target and traditional grocers like Kroger. The announcement comes a little more than a month after the chain said it was adding healthier choices at checkout. It also agreed to get rid of synthetic colors and partially hydrogenated oils from Aldi's exclusive food brands.
Aldi is expanding quickly and plans to open its first group of stores in Southern California by the end of the month. It aims to operate nearly 2,000 stores in the U.S. by the end of 2018. That's still a fraction of Wal-Mart's U.S. store base of more than 5,000.
Aldi is known for its ruthless cost-cutting. Products are in boxes on shelves, so it reduces labor costs. The chain boasts low prices every day but with limited assortment.
"We care about being able to make our customers' shopping experiences simpler and better every time they come to see us, and offering them the convenience of using their credit cards will help us do just that," said Jason Hart, CEO of Aldi, in a statement.
He said that Aldi's acceptance of credit cards will have no impact on prices that shoppers pay.
In the United Kingdom, Wal-Mart's ASDA operations are slugging it out with Aldi, which is ramping up its presence there as well. Asda is increasing its investment to lower prices to compete with Aldi and has joined Europe's leading buying group to pool the collective buying power of 250 supermarket chains so it can realize the savings.