THE FRIDAY 5: ALDI U.S. Names New CEO; Target Focuses on Large-Format Stores

1. Leadership Shakeups at ALDI U.S. 

As a new month began, ALDI U.S. dropped big executive news, announcing that current CEO Jason Hart has been promoted to group COO on the executive board of ALDI South. When he takes on that role in September, current ALDI U.S. COO Atty McGrath will step into the CEO role at the fast-growing discount retailer based in Batavia, Ill. McGrath will leverage her two decades of retailer experience to propel the company through its intense growth phase, as ALDI is on track to open 800 new stores over the next five years.

“The growth and positive development of the ALDI brand we’ve achieved together in the U.S. is a tribute to our incredible teams across the business. I look forward to working with ALDI teams around the globe to drive our growth and success,” said Hart.

Added McGrath: “I am excited to build upon our momentum, expand our footprint and continue adapting to serve our customers.”

To be sure, it was a busy week on the news front for ALDI. As summer gets underway, the discount retailer shared that it is dropping prices on more than 400 items to provide price relief to inflation-weary consumers; ALDI is also launching its annual campaign supporting Alex’s Lemonade Stand Foundation in its quest to battle childhood cancer.

Meanwhile, the retailer also made the headlines after Mondelez International Inc. sued ALDI U.S., claiming that the chain is copying the CPG giant’s packaging for its store-brand cookies and crackers. Mondelez contends that ALDI’s packaging is “likely to deceive and confuse customers.”

2. Target Goes Big on New Store Approach in DFW

Lots of things are bigger in Texas and so is the latest Target site. Readers were interested in details about the retailer's new larger-format store in the Dallas-Fort Worth Metro area that spans 147,000 square feet and features a larger-than-average fresh and frozen food and beverage section, along with a sizable back-room fulfillment space. The recently-unveiled location is an example of what’s to come as Target focuses on larger-format stores.

“We can show up for guests for all their grocery needs, where they don't have to look at a competitor,” said Store Director LaShon H. “We can be their one and only, from fresh produce to amazingly priced meats. Everything is affordable, and then joy can be given when you walk through the departments in our store. [It has guests saying] ‘This is bright, this is big. I’m glad you’re on this side of town.’”

The Metroplex is an important market for the Minneapolis-based retailer, which is planning at least five more stores for that area over the next couple of years. Target expects to add more than 300 locations over the next decade, with a total of 20 openings slated for 2025.

3. Costco Leaders Get Candid About Tariffs and Tech

Reader were keen to learn how Costco Wholesale Corp. is performing and pursuing additional growth, including its investments in technology. In its latest financial report released on May 29, the global club operator shared that it expects to add faster checkout systems and is working on digital membership cards to improve service to shoppers who are becoming accustomed to automation and speed.

“Our operations team is really focused on the front ends and we know there’s many benefits to that part of the Costco experience of moving people through much better,” said CEO Ron Vachris on the earnings call.

Costco’s investments come as the operator is humming along with an 8% year-over-year sales gain in the third quarter and a net income that hit $1.9 billion, compared to $1.68 billion in 2024. Will tariffs bend this growth trajectory? CFO Gary Millerchip addressed that hot topic in the call with analysts. 

“It’s just such a dynamic environment right now that really the focus that we’ve had in our buying teams is really staying agile to manage the situation,” he noted. “A lot of the focus the team has right now is as we look at the impact of tariffs is ‘Where are the places we can work with our suppliers to find ways to be offsetting some of the impact of those? Where are places where we could potentially be sourcing with them from different countries if that’s practical to minimize the impact?’”

4. What’s Next for CatMan?

The “Father of Category Management,” Dr. Brian Harris, recently talked with Progressive Grocer's Senior Editor Lynn Petrak about the evolution of the principles and practices that he pioneered back in the late 1980s. AI is providing a launchpad for the next generation of category management, asserts Harris.

He is right there at the launchpad as president and co-founder of IntentAI, a startup focused on identifying growth opportunities for retailers and CPGs through next-generation Category Management process combined with its AI software. 

“The next generation of category management, then, will be an upgraded process, above and beyond the eight steps, and driven by the power of AI. It’s not Category Management 2.0, which would be tweaking one of the steps here and there. It's absolutely next generation that builds on the traditional proven practices while addressing limitations of the industry today and provides the foundation to unlock exceptional growth opportunities for all parties involved," Harris said.

According to Harris, AI speeds data analysis and provides real-time insights for better, quicker execution in the marketplace. He also shared feedback from retailers who believe that AI won’t replace people as much as it will empower them to work smarter.

5. Walmart’s Take on AI

On that topic of AI, that technology continues to dominate many discussions about the near-term and longer-term future of the industry. Progressive Grocer’s Multimedia Editor Emily Crowe was on hand at Walmart’s Associates Week at the retailer’s Bentonville, Ark., headquarters this week to learn about how the retail giant is leaning into AI to redefine its business.

One key learning is Walmart’s recognition that the future won’t be defined by AI for its own sake, but by how well such tools serve customers’ needs. Walmart’s new Retail Rewired Report, shared at that event, shows that the technology is reshaping the way people shop and is gaining trust among shoppers for shopping recommendations. Still, the report affirms that consumers have a strong desire for human insight and control.

Human control will be crucial as agentic AI advances. Walmart also shared some of its work with AGI, to solve for specific use cases tailored to its business needs, including tasks such as item comparison and shopping journey completion, all within its GenAI-powered shopping assistant.

Other notable news came out of Walmart’s Associates Week held June 4-6. The retail behemoth shared updates about its drone delivery in five states, with services added to 100 stores throughout Arkansas, Florida, Georgia, North Carolina and Texas, in addition to current operations in Northwest Arkansas and the Dallas-Fort Worth area.

“As we look ahead, drone delivery will remain a key part of our commitment to redefining retail,” said Greg Cathey, SVP, Walmart U.S. transformation and innovation. “We’re pushing the boundaries of convenience to better serve our customers, making shopping faster and easier than ever before.”