Retail: Discount inventor Aldi is testing online food retail

Retail: Discount inventor Aldi is testing online food retail

After much hesitation, Aldi Süd is taking its first steps in the German online food trade. In the Ruhr area, you can have products ordered online delivered to your home as a test. And after the test run?

For a long time, the discount inventor Aldi hesitated to enter the risky online trade in fresh food in its home market. Like its rival Lidl, the low-cost supplier left the fast-growing market to newcomers like Picnic or Flink and established supermarket chains like Rewe. After all, it is an open secret that so far no one has made sustainable money with such offers.

But now Aldi Süd no longer wants to limit itself to watching. In the Ruhr area, the discounter is starting its first German test run in online food retailing, as the company reports. Customers in Mülheim an der Ruhr, Duisburg and Oberhausen can now register for the “meinAldi” delivery service and have the goods ordered online delivered to their home by electric delivery van. The offer ranges “from fresh fruit and vegetables to bread, cheese and milk to drugstore items,” the company said. The “Handelsblatt” had previously reported on it.

Experiments with foreign subsidiaries

It is a remarkable step for the long-established company. So far, the discounter had offered products from vacuum cleaners to knife blocks in its German online shop and avoided the difficult business with perishable food. However, there were experiments with food deliveries at foreign subsidiaries in the USA, Great Britain and Switzerland.

Aldi Süd emphasized that the new offer in the Ruhr area was only a local and time-limited test run. “Currently, a nationwide implementation is not planned.” Because online food trading in Germany is currently unprofitable due to the high costs for personnel and logistics.

What is striking is that the initiative comes at a time when the industry is beginning to separate the wheat from the chaff. Particularly in the case of fast delivery services such as Flink, Gorillas or Bringmeister, a tough selection is taking place, with more and more companies disappearing through sale or withdrawal from the market.

Rival Lidl does not look at the cards in view of the Aldi-Süd advance. “Basically no information is given on the future strategic orientation,” said the company’s headquarters in Neckarsulm. Aldi Nord also initially did not comment on its plans in this area.

Edeka and Rewe have long been ahead of the discount market leaders. Rewe, in particular, has continuously expanded its e-commerce offering in recent years and now delivers the groceries ordered online to customers in more than 90 cities and their surrounding areas. The retail giant is also involved in the fast delivery service Flink.

Edeka has joined the rapidly expanding delivery service Picnic. There are also numerous independent Edeka dealers who deliver fresh products to your home.

“Waiting and Watching”

The e-commerce expert Gerrit Heinemann from the Niederrhein University of Applied Sciences does not consider it a mistake that Aldi Süd is only now examining the market. On the contrary. “Aldi Süd was smart not to rush into the online grocery business and burn a lot of money in the process. They waited and watched which delivery model worked so well that in the end you could actually make money with it. Now they’re trying it out .”

The Aldi Süd concept is similar to that of Picnic. This means that the delivery should be based on the milkman principle, in which the delivery vehicles drive fixed routes within a delivery area. For customers, this limits the choice of delivery time, but the greater bundling of routes reduces delivery costs.

“With the milkman model, Aldi Süd is a huge step ahead in terms of profitability than its competitors Flaschenpost, Flink or Rewe,” says Heinemann. The discounter therefore has a good chance of getting into the black in locations with a high population density. “Aldi will only move the lever to roll out this model if the test has been successful on this point.”

Kai Hudetz from the Cologne Institute for Trade Research is also following the Aldi experiment with great interest. “The test could give an indication of whether customers are willing to pay a reasonable premium for a discount delivery service.” Because the minimum order value for the deliveries is 20 euros. Up to a purchase value of 50 euros, a service fee of 4.50 euros is added. Shipping is free for larger orders only.

Such delivery fees are anything but popular with customers, but they are actually unavoidable for industry experts. “As consumers, we need to move away from the idea that grocers can deliver products to our homes for the same price they charge in the store.” In view of the already low profit margins and the high logistics costs, this will not work, especially for discounters.

Source: Stern

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