Following the launch of a pilot partnership with Instacart to offer grocery home delivery last year, Aldi is extending the service to additional locations.
Expanding the service to a major market
Last year, Aldi launched the service in Atlanta, Dallas and Los Angeles, providing shoppers with the opportunity to have their orders delivered in as little as one hour. The service is being expanded to shoppers across Chicagoland, Northwest Indiana and Rockford. This is a major market for Aldi, with almost 200 stores in the area.
Several retailers partnering with Instacart
The launch of the pilot grocery ecommerce service last year was the first for a hard discounter in the US. While several different ecommerce models have emerged in the market, several retailers have partnered with Instacart for home delivery, enabling them to build a presence at a relatively fast pace in the channel. Albertsons, Publix and Wegmans have all announced new initiatives with the company over the last 12 months. The channel continues to see increased investment as retailers scale up their presence as they seek to capitalise on a market which is set to double in scale by 2022.
Aldi investing $5bn in US operations
This initiative comes as Aldi undertakes a $5bn investment program in the US. In addition to investing $3.4bn to extend its network to 2,500 stores by the end of 2022, it is also investing $1.6bn in remodelling 1,300 stores by 2020. Partnering with Instacart will potentially help the retailer to reach new customer groups and gain share in the fast-evolving ecommerce channel. Recently it announced a pilot program to open up to ten stores in partnership with Kohl's, a clothing and homewares retailer in the US.
Discount retailing as a disruptive force
The discount channel has received a significant amount of attention over the last nine months in the US. In addition to Aldi’s investment plans, Lidl has opened its first stores in the market. This has led to intensifying price competition and new private brand initiatives from several major retailers. With Aldi also moving into ecommerce, it could start to impact two of the fastest growing channels in the US.