ECOMMERCE

Aldi turns up the heat in already competitive supermarket industry

BY Marianne Wilson

German discount grocer Aldi is jumping into home grocery delivery.

The retailer announced a pilot program with Instacart, the on-demand grocery delivery service. Starting later this month, the service will be available in Atlanta, Dallas, and Los Angeles, with potential for future expansion.

Shoppers in the pilot markets will be able to fill their virtual carts by visiting Instacart.com or downloading the Instacart app. At checkout, they can choose a delivery window that works best with their schedule, anywhere from an hour or up to a week later.

Aldi's partnership with Instacart will help it compete with more upmarket grocery chains that have already made home delivery part of their game plan. It also gives the no-frill chain a leg up on another German discount grocer, Lidl, which has just started expanding in the United States.

"Our partnership with Instacart is another example of Aldi expanding our commitment to customer convenience and value," said Jason Hart, CEO of Aldi, which operates nearly 1,700 U.S. stores in 35 states. "We know customers are looking for new ways to save time and money. Instacart provides easy access to our low prices at the click of a button."

To celebrate the partnership, Aldi and Instacart are offering customers $20 off their first Instacart order until Sept. 30.

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REAL ESTATE

New centers hold higher costs for tenants

BY Al Urbanski

As 20th Century malls give way to 21st Century mixed use centers, retail tenants need to arm themselves against giving away too much away during lease negotiations.

That’s the caution of National Retail Tenants Association director Paul Kinney, who strongly advises retailers to consider both long and the short-term implications of the leases they sign.

“For tenants, this transitioning period means serious risk of overcharges from incorrect allocations due to expanded and reconfigured centers, or added uses which are more complicated and time consuming to keep track of and reconcile,” Kinney said.

Just as landlords have the freedom to change the mix of stores in their centers as trends shift, Kinney pointed out, so should retailers retain the right to employ a different name or merchandising strategy geared to a specific property.

The association chief added that establishing occupancy cost review processes is essential for retailers looking to avoid costs passed through in common area maintenance charges that are pooled and allocated with office and residential spaces in mixed-use projects.

“The retail of the future will look very different from what we see today,” Kinney said.

These and other crucial topics for tenants in a changing retail environment will be explored at NRTA’s annual conference beginning in New Orleans on Sept. 24.


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FINANCE

Moody’s: Amazon to ‘kick start’ its grocery business with purchase of Whole Foods Market

BY CSA STAFF

Moody's Investor Services is feeling positive about Amazon's plans to acquire Whole Foods Market.

The ratings agency assigned the deal a Baa1 rating and revised Amazon’s credit outlook to positive from stable, reported Marketwatch. The report also said that Amazon is planning to issue up to $16 million in debt to fund the online giant's acquisition of Whole Foods.

The move “reflects our view that despite the increase in debt, the Whole Foods acquisition is an immediate credit positive for the company on a variety of fronts,” Moody’s VP Charlie O’Shea wrote in a note. “Whole Foods provides Amazon with greater scale and a crucial brick-and-mortar presence in a segment where it has been trying to grow, and the almost 500 existing Whole Foods locations can be utilized to expand food delivery, as well as provide pickup points for online orders of any type.”

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