Key Points:
- Aldi is planning an aggressive expansion into Colorado over the next five years. This week, the locations for its first two were shared, and both look like wise choices.
- Both locations are near a Sprouts, and so it’s not just incumbents King Soopers and City Market that need to watch Aldi’s plans. Sprouts should know how to work with this new competition given that it has many locations in Florida with a nearby Aldi. We looked at Sprouts’ “Aldi situation” in Florida; it looks benign.
Aldi intends to open 50 locations in Denver and Colorado Springs over the next five years; we’d call that an onslaught against King Soopers and City Market (both owned by Kroger). Over time, we’ve noticed a lot of similarity between the Colorado and the Minnesota consumer. Aldi has 47 locations in the Twin Cities market, which houses around 3.0M peoples, whereas the Colorado markets have 4.0M. As such, on the surface, the 50 goal seems reasonable. We estimate that Aldi does about $24M per location (’25) in the Twin Cities, but power locations like Penn Ave in Richfield do $54M (Advan #s), and its YTD traffic is +9%. Wowzah! -- still powering higher. This week, Aldi provided the addresses for the first two Colorado locations and so let’s go below the surface on these.Next, we show each of the locations and the performance of incumbent neighboring grocers. Our conclusion is that both sites look promising. They also neighbor an existing Sprouts location, and while that might engender some apprehension by SFM stock owners and landlords, the evidence from Florida suggests there is little to be concerned about.
E 57th Ave & Tower Rd - Green Valley Ranch- ~19.4K sq-ft & 109 parking spaces
Just southwest of the airport, this is to be on a newly built lot, with Sprouts and Dave’s Hot Chicken across the way. As shown in the second panel below, Costco is 3 miles away and King Soopers, 1 mile. The Sprouts ranks #12 out of 35 in Colorado. The King Soopers #9 out of 114 in Colorado. The visitor mix to the Sprouts is definitely young, as shown in the panel below. Given the competitive set within the area, it looks as if Aldi will be able to amplify its value positioning and find strong receptivity and good sale volume.
9111 E. 40th ave- Denver’s Central Park area ~20K sq-ft & 90 parking spaces
Just off Interstate 70 and north of Stapleton, Walmart and Sam’s are 1.3 miles away and Sprouts is 1 mile south, giving this Aldi location a favorable position given the traffic flow exiting 70 and entering the trade area. It also neighbors a Chick-fil-A and Starbucks (ranked #115 out of 233 in Colorado) sits across the street. However, this region is also more competitive for value as the Walmart is strong, ranking #29 out of 86 in Colorado, and the nearby Target is #7 (out of 44). The Sprouts is only #17 (out of 35) and the King Soopers is #76 (out of 114). Chick-fil-A is very popular with this Sprouts’ shoppers, as shown below (filtering for just restaurants & retail), as is Target.
Given that both of the new Aldi locations are near a Sprouts, it suggests that more of its locations may face a new Aldi and that its Colorado business will come under siege; however, Sprouts knows Aldi well as they go head-to-head in many markets. In Florida, Sprouts has 14 locations with an Aldi within ½ mile. We used Advan + Claude.ai to evaluate how these are performing. We show its answer below; our conclusion is that the presence of an Aldi doesn’t appear to be a hindrance given the greater number of locations that are growing vs. declining, and given that the 42 other locations in Florida (excluding outliers) experienced a weighted average traffic decline of -0.6%. Moreover, of the 14’s lower-ranked locations, all except Tampa (N Dale Mabry), are newer and showing strong growth. We also looked at Q2’26, and the story was largely the same with two exceptions: Oviedo improved a lot and it’s also a high traffic producer. By contrast, Deerfield Beach on S Federal Hwy reversed; however, it only does 1/5th of Oviedo’s volume.
