CHICAGO: German grocery chain Aldi Inc said it has partnered with Instacart Inc to deliver groceries in three US cities, a move that comes amid intense competition and disruption in the industry.
Aldi will launch a pilot starting the end of this month in Los Angeles, Atlanta and Dallas with the potential of expanding to more cities in the future.
The German retailer does not offer customers an option to shop on its own website now and the partnership is a way to test online grocery demand, Aldi’s Vice President of Corporate Buying Scott Patton said.
“Grocery shopping online is a relatively small part of the business but it is continuing to grow,” Patton said.
A report from the Food Marketing Institute and market research firm Nielsen in January this year estimated online grocery spending during 2016-2025 to grow from 4.3 per cent of the total US food and beverage sales to as much as 20 per cent, or more than $100 billion. Last year, online grocery sales were about $20.5 billion.
Aldi’s move also comes at a time when grocery chains in the country are caught in a price war. German rival Lidl has started opening stores in the country and online retailer Amazon.com Inc said in June it will acquire grocery chain Whole Foods Market Inc.
To better position itself, Aldi said in June it would invest $3.4 billion to expand its US store base from more than 1,600 currently to 2,500 by 2022.
In May, Aldi Chief Executive Jason Hart said the chain intended to have the lowest prices and would focus on adding in-house brands to win over price-sensitive customers. — Reuters
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