Kohl’s and Aldi: A Win-Win for an Overspaced Department Store and a High-Growth Grocery Chain

Executive Summary

• Kohl’s will be carving out space from 5–10 of its stores and leasing that space to grocery discounter Aldi.
• Aldi’s average store is 20,000 gross square feet, equating to 23% of a typical Kohl’s full-range store, which measures 88,000 gross square feet.
• Kohl’s is uniquely positioned among the top tier of US department store retailers to make this move, as many of its stores are located in the kind of open-air centers in which Aldi prefers to locate its own stores.
• The Kohl’s initiative follows its recent introduction of Amazon technology departments and Amazon returns services at some of its stores.