Aldi’s partnership with Instacart enables its entry into the grocery delivery game

Aldi Inc., one of the most reputed supermarket chains in Germany, is reportedly planning to join forces with Instacart, with an aim to offer groceries in three U.S. cities. Aldi’s alliance with Instacart is expected to pave the way for the former to battle against the industry behemoth - Amazon.

This move by the German discounter to penetrate the US online retail market, comes amid fierce competition and disruption in the industry. Amazon’s recent acquisition of Whole Foods for a valuation of USD 14 billion this year has already sent waves of frenzy in the online grocery industry, initiating the business players to prepare for battle. Whole Foods’ close ties with several delivery services has left the U.S. grocers jostling to defend themselves against Amazon’s gigantic logistics and shipping network. Aldi, despite being a minor player in the U.S market, has undertaken a bold endeavor by partnering with Instacart, post the delicate situation of startups in the online food market.

Online shopping of groceries is a relatively small part of the retail business, but it is continuing to grow at a very fast pace. As per a reliable report, online grocery spending is anticipated to grow to as much as 20% or more than USD 100 billion over 2016-2025, from a modest 4.3% (USD 20.5 billion) of the total U.S. food and beverage sales in 2015.

Aldi, will soon begin its delivery program by late August in Atlanta, Dalllas, and Los Angeles and is set to expand to more cities in future. With this partnership, customers will be able to purchase groceries online and get them delivered quickly – at most, within one hour. This move gives a clear sign of how intense the competitive landscape of the overall grocery market is.

For the uninitiated, Aldi penetrated the U.S. market around 40 years ago, and has now built a chain of 1700 stores in 35 states. In addition to this, it is now planning to invest over USD 5 billion and consolidate its position as the third-largest US grocer. Besides, Aldi is also expected to have the lowest product prices and is renowned to introduce discounts and in-house brands to attract the price-sensitive customers.

The partnership of Aldi and Instacart will allow the customers to order goods from Aldi’s stores, using Instacart’s mobile app or website. Instacart touts itself as a same-day grocery delivery service provider and has expanded its partnerships with Publix, Wegmans, and Ahold Delhaize in a bid to bring more U.S. consumers into the company’s orbit. Other US retailers who have secured their strings with Instacart include Costco Wholesale Corp., Whole Foods Market Inc., and Target Corp.

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Ojaswita Kutepatil

Ojaswita Kutepatil develops content for Market Size Forecasters. A mechanical engineer by qualification, worked as a BDE and Technical Engineer before switching her profession to content writing. As an Associate Content writer, where she pens down write-ups pertaining to the market research industry...

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