Aldi Starts U.K. Online Push With Wine as Profit Declinesby
Merlot by the case to be sold on Web from early next year
German discounter says U.K. operating profit fell 4% in 2014
Aldi announced plans to start online sales in the U.K., the latest step in a drive by the budget chain to grab shoppers from Britain’s established supermarkets.
Wine by the case will be available on the Web from early 2016, to be followed by some non-food items, the German discounter said in a statement Monday as it reported a 31 percent increase in British revenue for 2014. Aldi has no plan to sell food online, U.K. chief Matthew Barnes said on a call.
Aldi’s move into e-commerce is a departure from the no-frills strategy that has seen the discounter grab market share from its larger rivals. Along with Lidl, closely-held Aldi has shaken up the U.K. grocery market. Its rapid growth has sparked a price war in the industry as the likes of Tesco Plc and J Sainsbury Plc strive to win back customers.
Non-food items such as camping equipment and school uniforms will become available online in the spring, Aldi said, mirroring promotions in its stores. The move is low risk, according to Bruno Monteyne, an analyst with Sanford C. Bernstein.
“Compared with non-food, there is a gigantic difference in the technology required to sell food online," Monteyne said by phone. “The big U.K. grocers have been selling wine online for 20 years."
Discounting contributed to a 4.1 percent drop in Aldi U.K.’s 2014 operating profit to 260.3 million pounds. Sales rose to 6.89 billion pounds ($10.5 billion), fueled by new store openings.
Aldi is now Britain’s sixth-largest supermarket chain, with a 5.6 percent share of the market, according to researcher Kantar Worldpanel. The company has 598 U.K. stores, with plans to expand to 1,000 by 2022.