Aldi’s Deliveroo experiment reveals Christmas e-commerce potential for discounters: GlobalData

As e-commerce and delivery ramp up – due to Christmas, COVID-19 and lockdowns – German discounter, Aldi, has expanded its tie-up with Deliveroo to almost 130 of its 900 stores in the UK and would extend a click and collect trial to an additional 200 stores by Christmas. COVID-19 has resulted in online grocery shopping almost doubling Aldi’s share of total UK grocery sales, increasing from 7.3% in 2019 to 12.5% in 2020, and it is expected to increase again to 13.1% in 2021, according to GlobalData, a leading data and analytics company.
Ryan Whittaker, Consumer Analyst at GlobalData, comments: “The pandemic has prioritized the e-commerce channel, as many consumers are no longer willing or able to patronize brick-and-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 will continue to browse for all products online rather than in stores in the wake of the pandemic.
Whittaker continues: “The move online has put discounters in a precarious position, as their business models had been more focused on streamlining the brick-and-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. Retail giant Tesco reported a 69% growth in online sales in 2020.
Whittaker adds: “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 and 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.”
* Covid-19 recovery tracker consumer survey, November 10, combining answers “I have never spent time on this but will start doing so now”; “I intend to spend significantly more time on this than before” and “I intend to spend slightly more time on this than before”
**2 Covid-19 recovery tracker consumer survey, November 10, 2020