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The war between affordable grocery stores is heating up, with Aldi announcing a big expansion. Time

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Aldi, an upstart German discount grocery chain, announced Monday that it is planning to open 900 new stores in the United States in the next five years.

The announcement comes days before another German chain that also has smaller-format stores, Lidl, opens its first American stores.

Aldi, which first came to stateside with a store in Iowa in 1976, currently has 1,600 stores in 35 states.

In addition to its planned $3.4 billion capital investment which comes with 25,000 new jobs, the supermarket company also said it plans to spend $1.6 billion to remodel 1,300 of its existing stores by 2020, according to the company.

Aldi's stores are smaller than traditional supermarkets at about 12,000-square-foot space. That's only big enough for about five aisles. And about 90% of the items in those aisles are house brands with names like Southern Grove, for nuts and dried fruit, or Savoritz, for crackers. Stores also have an area where new non-food merchandise, ranging from summer flip-flops to luggage to wet-dry vacuum cleaners, is sold for a limited time.

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Aldi products may be cheaper than brand names, but the bigger question is how they compare in taste. USA TODAY

“We have passionate fans who know Aldi offers a smarter way to feed their families in a modern, convenient and easy-to-shop environment,” said CEO Jason Hart.

The supermarket industry is already crowded, as old-school grocery chains now have to compete with big-box stores, online companies and specialty stores, like Whole Foods.

Lidl also uses the small-store model, though its size is around 20,000 square feet. And like Aldi, it offers a limited selection of products, the vast majority of which as exclusive brands.

Its first U.S. stores open in Virginia, South and North Carolina on Thursday.

Follow USA TODAY reporter Zlati Meyer on Twitter: @ZlatiMeyer

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