ALDI national rollout of Instacart shows ‘US online grocery arms race is accelerating,’ says analyst

By Mary Ellen Shoup contact

- Last updated on GMT

ALDI national rollout of Instacart shows ‘US online grocery arms race is accelerating,’ says analyst

Related tags: Aldi, Instacart, Online shopping

ALDI’s move to offer online grocery delivery via Instacart to US customers nationwide proves there is room for more than just Amazon in the e-commerce game, according to Jack O’Leary, senior analyst at PlanetRetail RNG.

ALDI announced earlier this week that it had expanded the availability of Instacart after successful pilot programs in four US cities (Atlanta, Dallas, Los Angeles, and Chicago). ALDI products via Instacart will be available to 75 markets across 35 states by Thanksgiving, according to the company.

“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,”​ Jason Hart, CEO of ALDI US, said.

Many of the major retailers in the US such as Walmart, Kroger​, and Target have invested heavily in providing streamlined online grocery service for customers including home delivery and ‘click and collect’ options.

“The US online grocery arms race is accelerating. Amazon’s purchase of Whole Foods last year likely pushed more traditional grocery players, like ALDI, more firmly into the arms of Instacart,”​ O’Leary said.

“Despite its well documented moves in grocery, this competitive landscape should not be viewed as Amazon versus everyone else. The investments made by Walmart, Kroger, Target, and others in curbside pickup and home delivery have also raised the competitive stakes for all US grocery players.”

How Instacart works:

Shopping at ALDI with Instacart is just as easy as shopping in a physical ALDI store, the retailers claims. Customers fill their virtual carts by visiting Instacart.com/aldi or downloading the Instacart app. At checkout, customers can choose a delivery window — anywhere from an hour or up to a week later — that works best with their schedule, and an independent contractor employed by Instacart picks and delivers their order.

instacart_bag

How do customers feel about online grocery shopping?

While more and more grocery retailers are offering e-commerce options, how are consumers – including ALDI’s monthly reach of 40 million shoppers – taking to the online grocery shopping experience?

According to a recent survey by Mintel, while consumers are acclimating to the habit of buying groceries online, a majority (78%) are wary of the freshness of certain items (produce, meat, poultry and/or fish).

“Americans are exercising caution when shopping online as they believe that purchasing in store is the most trustworthy way to determine the safety, quality and/or freshness of the items they buy,”​​ Mintel senior e-commerce analyst Matt Lindner said.

“As a result, retailers have to go above and beyond in terms of offering more product information and anticipating any potential concerns from shoppers.”​​

Despite some hesitancy with purchasing certain fresh items online, more than half (56%) of American shoppers said they are more likely to look for deals online versus making a trip to a physical store.

Retailers should emphasize the cost and time savings of using its online platforms to customers, according to Lindner.

For ALDI, the uptake of Instacart users has been very positive as customers have access to a wide variety of grocery items such as fresh groceries including organic produce, antibiotic-free meat and fresh seafood available for delivery in as little as one hour.

And a sizeable portion of ALDI online shoppers are purchasing fresh items using Instacart, an ALDI spokesperson told FoodNavigator-USA.

Forty percent of our Instacart orders are fresh products, including produce, dairy, eggs, meat and seafood,”​ the spokesperson said.

The private label retailer added that it would continue to explore adding more convenient grocery options to its customers as part of its $5.3bn investment into the remodel and expansion of its US stores by the end of 2022.

“E-commerce is projected to grow over the next decade due to consumer demand, and we’re evolving to grow with it via our continued partnership with Instacart. Instacart offers the added convenience we know shoppers want, while maintaining our ability to provide high-quality groceries at low prices,” ​the ALDI spokesperson added.

ALDI-Monrovia-tom2

SPECIAL FEATURE: ‘Who shops at ALDI? You, me, anyone who eats food…’ 

Consumers are tired of cavernous stores with “90 different jars of pasta sauce,” ​said Tom Cindel, director of operations at ALDI’s Moreno Valley, CA, division, pointing to a shelf at the recently opened store in Monrovia, CA. “We just buy this one, it’s the same quality or superior to any leading national brand, and we buy a heck of a lot of it.” Read more HERE.

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