(Yicai) Nov. 5 -- Aldi has doubled the pace at which the German supermarket chain is opening stores in China this year, aiming to have 150 outlets across the country by the end of 2026, according to the chief executive officer of its Chinese business.

Aldi China expects to open around 60 stores this year, roughly twice the number as in previous years, Jacqueline Chen said in a recent interview with Yicai.

Aldi has more than 10,000 outlets in over 10 countries. It entered the Chinese market in 2019 and now has more than 70 stores in Shanghai and over 50 in the southern region of Jiangsu province, according to the company’s website.

Aldi China will also invest more heavily in its supply chain, including logistics centers, to underpin the growth of its hard-discount model, Chen said. The company recently opened its third major warehouse in East China in Nanjing, which will enable it to open stores faster across the region, she said.

“Supply chain capacity must be built before entering a new market,” Chen explained. “Under the hard-discount model, we aim to improve the balance between efficiency, costs, flexibility, and resilience.”

Most Aldi stores are compact neighborhood supermarkets of about 1,000 square meters, stocking around 2,000 stock-keeping units, and more than 90 percent are private-label goods, including items the company believes could become bestsellers.. The high share of private-label goods allows Aldi to cut out the middlemen via its supply chain and build price advantages, Chen noted.

Despite headwinds across the whole retail sector, membership warehouse clubs and discount supermarkets stand out as the two most successful formats. Both are centered on ‘value for money,’ but the former targets more mid-to-high-end customers, while the latter draws shoppers primarily seeking low-priced items.

Discount supermarkets generally cap SKUs at between 1,000 and 2,000, largely private-label items to drive footfall through low prices. Products priced at around CNY10 (USD1.49) are a main selling point.

About one-quarter to one-third of products at Aldi supermarkets are priced below CNY10. Competitors such as Kinglomo, Mart Fresh, and Sanjiang Shopping Club also sell a wide range of goods around that price point.

CNY10 can be seen as a psychological price anchor. Merchants commonly set prices from CNY9.90 to CNY12.90 (USD1.48 to USD1.93) to trigger impulse purchases of ‘one extra item.' As long as the quality is decent, these items rarely draw many complaints, a senior merchandise developer and buyer told Yicai.

Impulse buying drops sharply once the price exceeds CNY13, which is why so many discount-supermarket products are about CNY10, the person noted.

Editors: Tang Shihua, Futura Costaglione