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Aldi plans UK online retail foray

News, 23 March 2015

LONDON/ESSEN: Aldi, the German discount supermarket chain, is reportedly planning to launch an online platform in the UK in a move that at least one analyst says could change the dynamics of the British groceries market.

According to German trade journal Lebensmittel Zeitung, Aldi is preparing for a large-scale trial in the UK in what would be its first venture into ecommerce in Europe, Essential Retail reported.

The company is said to regard the UK as more developed than Germany in the ecommerce sphere and views the country as a more suitable testing ground.

Aldi, along with fellow German discounter Lidl, has been making major inroads in the fiercely contested UK groceries market and already has 560 outlets.

Just last month, it announced plans to open more than 70 new stores and recruit almost 5,000 staff this year as it continues its challenge to the established "Big Four" supermarkets – Tesco, Sainsbury's, Asda and Morrisons.

As well as taking 4.8% UK market share, according to Kantar Worldpanel, the German retailer was also named as the UK's top brand in last year's YouGov BrandIndex 2014.

Although Aldi has not confirmed whether it intends to expand into online shopping, if it does then that would ramp up the pressure on other retailers, Research Farm analyst Daniel Lucht predicted.

"For now this is only a trial, however should Aldi decide to really venture into online grocery retailing in future, perhaps with a dedicated click & collect offer, then this would have the potential to change the dynamics of the entire industry," he said.

"At the moment online grocery is one of the defensive tactics other retailers utilise against the discounter threat. Once both Aldi and Lidl add the online channel to their overall proposition and tap into latent demand, all bets are off in terms of where their market share could go.

"There are still many areas of the UK underserved by Aldi and Lidl. Through an online home delivery offer – if this is where Aldi is going – shopper reach could become truly national."

Data sourced from Essential Retail, Telegraph; additional content by Warc staff