Will Aldi upset the grocery home delivery cart?
If you can’t get to Aldi, perhaps Aldi can come to you. The hard discount grocery chain has confirmed that it will begin a test of home delivery with Instacart at the end of the month. Aldi will expand the test, set for parts of Atlanta, Dallas and Los Angeles, if the pilot program goes well.
Aldi, which is known for high quality private labels and low prices, has been on an expansion tear. In June, the chain of roughly 1,700 stores announced a plan to invest $3.4 billion to expand to 2,500 locations across the U.S. by the end of 2022. Aldi expects to be the third largest grocery chain in America by that time.
“We pioneered a grocery model built around value, convenience, quality and selection and now Aldi is one of America’s favorite and fastest growing retailers,” said CEO Jason Hart in June. “We’re growing at a time when other retailers are struggling. We are giving our customers what they want, which is more organic produce, antibiotic-free meats and fresh healthier options across the store, all at unmatched prices up to 50 percent lower than traditional grocery stores.”
The chain follows Costco, Kroger, Publix, Wegmans and others that have dipped their toes into home deliveries of groceries in partnership with third parties. This allows Aldi to test the waters with minimal investment.
“Aldi follows the digital world and e-commerce just like everyone else in the business,” Scott Patton, Aldi’s vice president of corporate buying, told Fortune. “Online grocery retailing will be part of the future.”
Mr. Patton said Aldi’s decision to test home delivery with Instacart predates Amazon.com’s deal to acquire Whole Foods. Reports have suggested that Amazon’s push into grocery, which is expected to accelerate should its bid for Whole Foods be approved by regulators and shareholders, was a motivating factor for Aldi. Speculation is that Amazon will replace Instacart, which has received investments from Whole Foods and currently handles the chain’s home deliveries, once the deal is finalized.
- Aldi Ramps Up US Expansion with Goal of 2,500 Stores by End of 2022 – Aldi
- Aldi partners with Instacart to battle Amazon in the US – Financial Times
- Why Discount Grocer Aldi Is Getting Into the Delivery Game – Fortune
- Why is Walmart so concerned about Aldi and Lidl? – RetailWire
- Will Aldi and Lidl replicate U.K. success in the U.S.? – RetailWire
DISCUSSION QUESTIONS: What effect will Aldi’s home delivery option have on its business? Will the addition of delivery fees, for example, offset Aldi’s price advantage? What will Aldi’s move mean for the traditional grocery stores that compete with it?