The retail giant wants to reach new consumers by sharing its space with food sellers, and Aldi will be its first partner.
UPDATE: Earlier this year, shoppers were shocked to learn that hundreds of Kohl's stores were being redesigned to make room for outside partners, namely traditional grocers and supermarkets, to sell food. Now we've learned that the first to partner with the big-box retailer is none other than Aldi, the German-based supermarket that has made a name for itself based on private-label products.
On a company-wide earnings call, Kohl's announced that around 10 of its stores would initially host Aldi as a way to test the concept before opening up more adjacent stores in the future, Fortune reports.
This isn't the first time that Kohl's has struck up a partnership—it teamed up with Amazon last year to process returns for the online giant—but this test period with Aldi will determine if the department store will expand the partnership to 200 plus locations with room to do so.
Kohl's CEO Kevin Mansell didn't provide details into the timeline of Aldi's arrival in the first 10 stores, but it's clear that leadership is trying to keep up with evolving competitors like Target.
The original article, from Jan 18, continues below:
Food and clothing aren't typically things you expect to find sold together, though several retailers are trying to change that. Last fall German grocery retailer Lidl began selling an exclusive clothing line designed by Heidi Klum.
And now, a traditional department store is trying to bring more customers in by providing easy access to fresh food and other groceries, according to reports from the Milwaukee Journal Sentinel.
New Year. New Food. Healthy eating starts here, with the Cooking Light Diet.
In plans that have been in motion since 2016, Kohl’s has been reducing the retail space in stores by an average of 10 percent to make room for grocers to move in.
Rather than selling groceries on their own, however, the clothing-heavy department store will lease out newly freed up retail space to partners who would start their own operations within the same complex.
Julia Fennelly, director of corporate public relations for Kohl’s, told the Sentinel that there would be walls and a separate entrance separating the grocery aisles from the rest of the store—but the goal is that the partnership would drive more traffic to the neighborhood, and hopefully into Kohl’s as well.
If you live in Massachusetts, you can already see the first few hybrid Kohl’s locations: two downsized stores have already struck partnerships with Pier One and a locally owned supermarket, according to the Sentinel.
Kohl’s sales have been strong in an era where other legacy department stores are in trouble—the Sentinel reports that holiday sales were up nearly 7 percent, far outstripping competitors like Macy’s and Target.
Supermarket News reports that Kohl’s already has a partnership with Amazon to offer its products in stores and process returns, but it’s unclear if that partnership will bring Whole Foods locations into Kohl’s nearly 1,100 storefronts nationwide.
You can expect to hear more about Kohl’s expansion into groceries after the company reviews earnings later this year.