March 7, 2018

Kohl’s is adding Aldi grocery stores in up to 10 of its U.S. locations this year in a continued effort to adapt its business model for growing retail trends.

The locations weren’t announced when Kohl’s shared the news during a recent earnings call, alluding to the partnership as part of a larger effort to “right-size” its stores.

“Frankly, the size of the opportunity in our eyes is the 500 stores by the end of this year would have moved from a standard footprint to a small footprint,” CEO Kevin Mansell said. “All of those stores can be candidates to be right-sized, and … we think this is a big idea.”

In Sioux Falls, both Kohl’s stores already are within a mile of Aldi stores.

Kohl’s also has been experimenting with an Amazon partnership, accepting returns from the online retailer in some Kohl’s stores and creating Amazon store-within-a-store concepts.

“We really only have one objective here, which is the key priority we have as a company is to drive traffic and ways in which we can innovate and ideate to help improve the trend of traffic we’re open to consider, and this is one of those ideas, and we think it has a lot of merit,” Mansell said.

“We’re more focused on it being a great customer experience and making sure that that customer is happy when they do arrive in a Kohl’s store because that gives us the best opportunity to convert them into a sale.”

Kohl’s has about 1,100 stores nationwide.