Aldi is unleashing a billion-dollar price war - and it should terrify Walmart

The discount grocery chain Aldi is taking aim at Walmart with its billion-dollar plan to lower prices, redesign existing stores, and expand its footprint.

Reuters reported Thursday that Aldi plans to sell more items under its in-house brand, which keeps prices low for customers.

Aldi CEO Jason Hart told Reuters that Aldi's prices are 21% cheaper than competitors like Walmart.

The chain is also planning to open 400 new stores by the end of next year, according to Reuters.

Aldi is spending $1.6 billion to implement a new store design in 1,300 of its 1,600 US stores, Bloomberg previously reported.

The German-owned grocery chain debuted the new design in October at a store in Richmond, Virginia. The Aldi store has softer lighting than its older stores, as well as a larger fresh produce section, wider aisles, and electronic displays on the walls.

Here's what it looks like: