The German discount grocery chain is going big in the U.S. grocery industry, rapidly expanding its tie-up with online delivery service Instacart.
Aldi started working with Instacart last year in a bid to drive online sales, testing the waters in Atlanta, Chicago, Dallas and Los Angeles. Now it plans to launch its aggressive expansion of the same-day delivery programme in time for the crucial holiday shopping season, beginning with the U.S. holiday of Thanksgiving in late November. The 35-state expansion will cover 75 major U.S. markets, including San Diego, New York City and Miami, and more than 1,300 of its stores.
“Aldi is a pioneer and a leader in creating a shopping experience that works with people's busy lives,” said Jason Hart, CEO of Aldi U.S. in a news release. “Our partnership with Instacart and the expansion of our e-commerce options are more ways we are meeting the growing needs of today's shopper, who wants high-quality food at unbeatable prices.”
Aldi’s Instacart strategy has certainly paid off so far, allowing it to engage with customers who are new to the chain. Hart told Reuters that about a fifth of Aldi purchases on Instacart are made by people who have never shopped at the physical store. “That proves that we’re reaching new customers with Instacart, customers that find it inconvenient to get to local stores or maybe exclusively shop groceries online”, he said. “It means more growth.”
Aldi is the No. 5 retailer in the world, with over 10,000 stores in 20 countries. In the U.S. it currently has 1,600 stores in 35 states, and continues to grow rapidly at a time when many in the grocery industry are struggling. Last year, the discount chain launched a more than $5 billion plan to remodel and add 900 more stores across the U.S., growing its presence in the country to 2,500 stores by 2022.
As America’s grocery industry wars wage bitterly on, Aldi is succeeding on its own terms. Walmart, Target and a variety of traditional grocers, locked in battle with Amazon, have been slashing prices. Rival German discount grocery chain Lidl, also trying to make it in America, opened its first U.S. stores last year with prices 50% lower than its competitors’. But Aldi, whose products are 90% private-label, is less exposed to these tensions and price volatility, allowing it to largely stay above the fray.