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German discount supermarket Aldi Süd launches delivery service

Until now, Aldi Süd only delivered food to employees, but is now expanding the service to customers - in a few test cities to start with.

Published: 29 August 2023 10:21 CEST

A sign of the discounter Aldi Süd lists its opening times from Monday to Saturday. Photo: picture alliance/dpa | Sebastian Gollnow

Aldi Süd wants to expand a pilot project for employees into its own food delivery service.

Starting Tuesday, the popular discounter wants to deliver goods to residents in the western German cities of Mülheim an der Ruhr, Duisburg and Oberhausen under the name “Mein Aldi” – the region where Aldi Süd employees can already have groceries delivered to their homes, according to the Handelsblatt.

The deliveries will not come from the stores themselves but rather from a special warehouse, dubbed a Dark Store. Electric vehicles will deliver goods, which customers can select from a range of around 1,300 products on the website or via an app.

The first results from the test with employees were so promising that the discounter’s management wanted to expand the project, reported Handelsblatt.

Aldi’s delivery concept is similar to that of the Dutch start-up Picnic, where cars follow fixed routes within a delivery area in accordance with a “milkman principal”.

This has the disadvantage for customers that they can’t select their delivery window as with other German supermarket delivery services such as that from Rewe.

On the other hand, it means Aldi can deliver their goods at low cost.

According to the Handelsblatt, Aldi Süd is also planning to test “Click & Collect” where customers order their groceries online and pick them up themselves in the store.

Will the project be rolled out nationwide?

Aldi Süd said, however, that a nationwide implementation is not planned at the moment. “Not every one of these projects makes it beyond the test phase,” a spokeswoman told Handelsblatt.

Kaufland, a sister store to fellow discount supermarket chain Lidl, already operated a delivery service in Berlin a few years ago but discontinued it after a short time.

It is difficult for discounters to earn money with delivery services because the margins on many items are very low. But the logistics costs are always the same, no matter how much the delivered item costs.

READ ALSO: Your guide to German supermarkets

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Output is expected to expand 0.3 percent this year, the economy ministry said, up from a prediction of 0.2 percent in February.

The slightly rosier picture comes after improvements in key indicators — from factory output to business activity — boosted hopes a recovery may be getting under way.

The German economy shrank slightly last year, hit by soaring inflation, a manufacturing slowdown and weakness in trading partners, and has acted as a major drag on the 20-nation eurozone.

But releasing its latest projections, the economy ministry said in a statement there were growing indications of a “turning point”.

“Signs of an economic upturn have increased significantly, especially in recent weeks,” Economy Minister Robert Habeck said at a press conference.

The ministry also cut its forecast for inflation this year to 2.4 percent, from a previous prediction of 2.8 percent, and sees the figure falling below two percent next year.

“The fall in inflation will lead to consumer demand — people have more money in their wallets again, and will spend this money,” said Habeck.

“So purchasing power is increasing, real wages are rising and this will contribute to a domestic economic recovery.”

Energy prices — which surged after Russia’s 2022 invasion of Ukraine — had also fallen and supply chain woes had eased, he added.

Several months ago there had been expectations of a strong rebound in 2024, with forecasts of growth above one percent, but these were dialled back at the start of the year as the economy continued to languish.

‘Germany has fallen behind’

But improving signs have fuelled hopes the lumbering economy — while not about to break into a sprint — may at least be getting back on its feet.

On Wednesday a closely-watched survey from the Ifo institute showed business sentiment rising for a third consecutive month in April, and more strongly than expected.

A key purchasing managers’ index survey this week showed that business activity in Germany had picked up.

And last week the central bank, the Bundesbank, forecast the economy would expand slightly in the first quarter, dodging a recession, after earlier predicting a contraction.

German Economics Minister Robert Habeck

Economics Minister Robert Habeck (Greens) presents the latest economic forecasts at a press conference in Berlin on Wednesday, April 24th. Photo: picture alliance/dpa | Michael Kappeler

Despite the economy’s improving prospects, growth of 0.3 percent is still slower than other developed economies and below past rates, and officials fret it is unlikely to pick up fast in the years ahead.

Habeck has repeatedly stressed solutions are needed for deep-rooted problems facing Germany, from an ageing population to labour shortages and a transition towards greener industries that is moving too slowly.

“Germany has fallen behind other countries in terms of competitiveness,” he said. “We still have a lot to do — we have to roll up our sleeves.”

Already facing turbulence from pandemic-related supply chain woes, the German economy’s problems deepened dramatically when Russia invaded Ukraine and slashed supplies of gas, hitting the country’s crucial manufacturers hard.

While the energy shock has faded, continued weakness in trading partners such as China, widespread strikes in recent months and higher eurozone interest rates have all prolonged the pain.

The European Central Bank has signalled it could start cutting borrowing costs in June, which would boost the eurozone.

But Habeck stressed that care was still needed as, despite the expectations of imminent easing, “tight monetary policy has not yet been lifted.”

In addition, disagreements in Chancellor Olaf Scholz’s three-party ruling coalition are hindering efforts to reignite growth, critics say.

This week the pro-business FDP party, a coalition partner, faced an angry backlash from Scholz’s SPD when it presented a 12-point plan for an “economic turnaround”, including deep cuts to state benefits.

Christian Lindner, the fiscally hawkish FDP finance minister, welcomed signs of “stabilisation” in the economic forecasts but stressed that projected medium-term growth was “too low to sustainably finance our state”.

“There are no arguments for postponing the economic turnaround,” he added.