NYC sees discount grocery renaissance with new stores from Aldi, Lidl

“In a neighborhood known for setting trends, Aldi can bring shoppers the products they’re buzzing about faster than the competition — often in nine months or less — whether it’s Specially Selected Sourdough or Barissimo Cold Foam,” Chris Daniels, regional vice president for Aldi U.S., said in an email. “We’ve accelerated our growth across the state as more shoppers seek high-quality groceries at affordable prices, and we’re always looking for opportunities to bring the Aldi shopping experience to new communities.”

Lidl has also been expanding its presence in New York City and along the East Coast. Last year, it opened a store in Park Slope. Frank Kerr, chief customer officer for Lidl U.S., told Modern Retail in 2025 that the company has been mainly focused on expanding within its existing markets of New York, Washington D.C. and Atlanta. The goal, he said, has been to be “the only grocery store that offers incredible quality at unbeatable prices, despite rising costs with inflation or other external factors.”

As of last year, Lidl had about 190 stores nationally and said it plans to continue opening stores over the next 10 years. In New York City, Lidl opened a new store on Third Avenue in Manhattan’s Kips Bay in February. In March, it opened a new store in Brooklyn’s Crown Heights.

Target has also been opening new stores in the nearby area, despite being less focused on small-format stores in recent years. It opened a new store along Route 440 in Jersey City in May, and last summer opened a new store in Astoria. The chain just signed a lease for another 135,000-square-foot lease in Queens, according to Commercial Observer.

Several real estate brokers told Modern Retail that both lower-end and higher-end grocers have figured out ways to sustain a presence in the city, despite leasing costs that can be several times those of the suburbs and limited space. Discount grocers like Aldi and Lidl are likely trying to take advantage of a shopper base eager for deals in neighborhoods less saturated with local competition.

National chains like Trader Joe’s and Whole Foods have also proven that urban-centric concepts that utilize smaller spaces, multiple floors or cart escalators can succeed in New York City.

Trader Joe’s and Whole Foods opened their first New York City stores in 2006 and 2001, respectively. Trader Joe’s now has 10 stores in Manhattan, three in Brooklyn, three in Queens and two in Staten Island, according to its website. Whole Foods has about 16 locations in Manhattan, Google Maps shows. Since 2024, it has been upping its local presence with a new small-format store concept called Daily Shops.

“The idea is to use every single inch, which a lot of stores in Manhattan do a really good job of,” Whole Foods and Amazon evp of growth and development Christina Minardi told Grocery Dive in 2024. She added that the layout was meant to create a portfolio of Whole Foods stores that could accommodate multiple types of shopping trips.

Asking rents per square foot in the city can be several times what they are in suburbs, so the fact that these chains are still standing proves that they’ve found the demand or other ways to make their presence there make sense financially.

“They’ve all discovered it, that there’s a code that can be cracked here in New York, and a handful are now doing it,” said Dean Rosenzweig, an evp at CBRE who represents both tenants and landlords in retail commercial real estate deals, primarily in New York’s outer boroughs. “It’s figuring out how to get creative with real estate in New York and balancing the limitations of what’s available in real estate against the core things that you’re going to need still in order to operationally function on a successful enough level.”

Patrick Smith — a vice chairman of retail brokerage at JLL who has worked with retailers such as Walgreens, Sprouts Farmers Market, Dick’s Sporting Goods and Target — said grocers like Aldi have started to realize how many New York City markets, such as Hell’s Kitchen, are underserved, and they have found creative solutions through which to be there.

Whole Foods “proved to everybody … that people potentially would shop on two levels for grocery,” Smith said. “The better grocers now have taken [cues from] what has worked for entities like that, … [knowing] that you can do large format; you can have the same elements as what would exist in a suburban grocery store environment.”

Rosenzweig said few grocers in New York City have been able to give local residents access to a variety of dry goods and produce while also offering lower prices. “That was a niche that needed to be filled,” he said. He said discount grocery stores have a bit of a learning curve for the consumer, in that there will be a limited number of varieties, if not just one choice of brand, for each item, but that the tradeoff is lower prices. Fewer SKUs “means a simpler operating format and more controlled, disciplined labor costs, all of which translates into better pricing for the shopper,” he said.

The increased presence of grocers like Aldi and Trader Joe’s has increased pressure on other New York grocery operators, Rosenzweig said.

“The increased competition has helped them understand that prices have to come down in certain areas where they can,” Rosenzweig said. “There’s still a convenience factor and other things that will allow them to charge what they can charge, but clearly it’s been very healthy for the free market to put some downward pressure on pricing, which can only benefit the local residents here.”

On the opposite end of the spectrum, Christian Stanton — a retail principal for Avison Young in New York City who has worked on deals in the city for retailers such as Nike, Target and Lego — said he sees high-end grocers like Erewhon and Happier Grocery as big opportunities for future spaces in New York City.

“People are more thinking about where they’re going to go out to eat; they’re focused on what they’re consuming,” Stanton said. “Because of that, there’s a big demand for … a boutique or high-end grocery offering.”