Aldi Enters The Grocery Delivery Arena With Instacart

Always on the up and up with American consumers in what seems to be a heavily competitive market, Aldi announced Sunday that its stores will now deliver groceries in the Los Angeles, Atlanta, and Dallas areas thanks to a new partnership with Instacart.

While the delivery initiative will remain a pilot program through the end of this month, Aldi says it’s planning to expand this service to other cities in the near future – a move that is certainly reflective of the massive disruption caused by Amazon’s buyout of Whole Foods earlier this summer.

While Aldi doesn’t currently offer customers the option to shop online, Instacart is a service where users can use both desktop browsers and mobile apps to peruse big chain markets (such as Shaw’s or Costco) and then have their purchases delivered later that same day with a small delivery fee surcharge. Instacart is one of the first startups to employ the concept of a freelance personal shopper, which has gone on to inspire other startups such as Shipt.

This partnership is one of many steps that Aldi is taking to invest into its American holdings – earlier this June, the company said it would invest more than $3 billion to build almost 2,500 storefronts by 2022. This investment would make it the third-largest retailer of groceries in the United States, just tailing Walmart.

Aldi is competing against other strong contenders in the grocery market, including fellow German rival Lidl, to catch up to the rapid increase of business that is revolutionizing the food industry in the United States.

A report published by Nielsen in January estimates that consumers would feed the online grocery space, currently a measly 4 percent of all food sales, to equal more than 20 percent of the entire U.S. food and beverage business by 2025. That would equate to around $100 billion in sales every year.

As for Instacart, who has historically held very close ties with Whole Foods, one of the service’s first clients, this partnership might be the saving grace for the company. As Amazon has overtaken Whole Foods and is expected to further redevelop the chain’s delivery capabilities, Instacart’s deal with Aldi might be the first of many grocery retailers looking to get into the digital-based delivery space in the coming months.