Budget supermarket Aldi has revealed it will enter the e-commerce arena in 2016.
Aldi has enjoyed a massive surge in popularity in post-recession Britain, reporting a 30.7% increase in sales to £6.89 billion last year, despite a 4% drop in profits that it puts down to massive investment in new stores.
The German retailer has almost doubled sales in the past two years and is pushing ahead with plans to increase its physical, as well as its digital, footprint across the UK. Kantar Worldpanel’s figures suggest that Aldi was the fastest growing grocery retailer in the UK for 50 consecutive months up until September last year, which is astonishing progress by any measure.
E-commerce should provide the opportunity for even greater profits as the budget supermarket will start with its most popular products.
The online food shopping industry is set to be a bloody battlefield in the years ahead, as Amazon is launching Fresh and the established players such as Tesco and Waitrose’s Ocado services are all reporting a strong following. Order fulfilment houses and order delivery are key to the success of the e-commerce side of the business.
Of course with the physical supermarkets then the brands all technically have fully stocked depots all around the country, so much of the work is already done. Running a lean and efficient service is critically important, though, if it is to be a moneyspinner.
Quite how Aldi’s budget offerings will fare on the online marketplace remains to be seen and all eyes are quietly on Amazon, which has taken over a Tesco warehouse and is preparing for its assault on the UK food market.
Aldi, though, has established a solid following through the no-nonsense approach of offering fewer alternatives, bulk buying and passing the savings on to the customer. In cash-strapped Britain this has proved a winning philosophy and Aldi, once the brunt of jokes, is now an established force in the UK supermarket industry.
It aims to have 1,000 stores in the UK by 2022 and plans to recruit 35,000 staff within seven years. Of course there could yet be a seismic shift towards e-commerce in supermarkets, but only time will tell.