As e-commerce and delivery ramp-up due to Christmas, Covid-19 and lockdowns, discounter Aldi has expanded its tie-up with Deliveroo to almost 130 of its 900 stores in the UK, whilst extending a click & collect trial to an additional 200 stores by Christmas.
Ryan Whittaker, Consumer Analyst at GlobalData, commented: “The pandemic has prioritized the e-commerce channel, as many consumers are no longer willing or able to patronize bricks & mortar stores due to the threat of infection. Furloughs and working from home have encouraged many consumers online, almost doubling the e-commerce share of the grocery market.”
This forced movement to e-commerce is also likely to be permanent for retailers. GlobalData’s most recent survey (published November 10) found that 26% of UK consumers were spending more time shopping for groceries online. Furthermore, 41% of UK consumers said they would continue to browse for products online rather than in stores in the wake of the pandemic.
Whittaker said: “The move online has put discounters in a precarious position, as their business models had been more focused on streamlining the bricks & mortar experience, often with minimal, if any, online service and razor-thin margins. Aldi has experienced at least a decade of strong growth but was hindered during the pandemic due to limited online services. Aldi has once again shown its agility, however, by partnering with Deliveroo and expanding the scheme in preparation for Christmas.”
COVID-19’s impact on online grocery sales is predicted to be significant and lasting. According to GlobalData, the channel’s value is predicted to grow by 86.5% in 2020, with a cumulative value of £20.9bn.
Whittaker added: “As consumers stay home and cook more food in the run-up to Christmas, they will rely on e-commerce platforms to buy groceries, meaning discounters need to provide deliveries and click & collect services to compete. Deliveroo is an excellent choice from the consumer’s perspective; Aldi can list hundreds of items on the Deliveroo app, which are then picked by Aldi staff and delivered by riders in as little as 20 minutes, at a cost of £4.99.
“A just-in-time delivery system is extremely convenient for consumers in the run-up to Christmas, when deliveries increase and delivery slots become scarce. That convenience could absolutely make the difference for UK consumers.”
NAM Implications:
- Aldi obviously have a scalable relationship with Deliveroo…
- …and should soon reach a level of estate penetration where Lidl will want to follow.
- And given the likelihood that these trends will not reverse…
- Suppliers need to re-engineer to accommodate and optimise these new discounter realities…
- …for they remain the fastest-growing traditional retail sectors…
