In what could be termed as a creative partnership, Aldi and Kohl’s joined hands where the former will open in up to 10 Kohl’s stores around the country. The association marks the first pairing of food and fashion. The partnership could be a signal for a new kind of partnership where retailers get creative in finding ways to boost productivity and traffic.
Kohl’s has over 1100 stores, in strip or power center locations. Kohl’s has already begun the process of clearing space in nearly 300 of their stores and the addition of Aldi should add a much-needed traffic boost. In partnership with Amazon, Kohl’s has also in-store kiosks and taking returns in their stores.
Kohl’s started as a Wisconsin supermarket in 1946, became the biggest grocery chain in the Milwaukee area, and only launched its first department store in 1962.
While Aldi is working towards a path of having 2500 stores by 2022, the retailer is also remodeling all of their stores, adding more space and more focus on perishables and a slightly expanded product line.
“We will rightsize approximately 12 stores including a 5-10 store pilot effort with the fast-growing supermarket chain Aldi,” Kohl’s CEO Kevin Mansell was quoted as saying while discussing the company’s earnings.
Sales at Kohl’s stores open at least a year rose 6.3 percent during the most recent quarter, the while profits increased 38 percent.
According to the new plan, Aldi entrance will be separate from the Kohl’s front doors, and shoppers will go outside to get from one store to the other.
Aldi plans to spend USD 3.4 billion over the next five years to open 900 supermarkets, the company has said.
The arrangement allows Kohl’s to gain additional foot traffic without having to figure out how to operate a grocery business and for Aldi, renting space within Kohl’s stores is likely to be less costly than building stand-alone locations.
