Aldi is known for its permanently discounted prices and its famously odd products sold in the middle aisle.
Last week, the German-owned supermarket chain took another step into the Australian mainstream, trialling a grocery delivery service with DoorDash in Canberra ahead of a potential expansion around the country.
Aldi has long resisted offering deliveries, given the service would make a basket of groceries more expensive, undercutting its price advantage over Coles and Woolworths.
Guardian Australia tested it out.
Filling a basket
I normally take an ad hoc approach to grocery shopping and visit a few different stores, rather than doing a weekly shop. There’s an Aldi near my home, as well as a Coles, and a family-owned fruit and vegetable store.
Using my DoorDash account, I added 10 popular items to my Aldi basket, listing a Canberra address for delivery. These comprised a dozen free-range eggs, a head of iceberg lettuce, a two-litre bottle of A2 brand light milk, a loaf of multigrain sourdough bread, a pack of RSPCA-approved chicken breast fillets, five brushed potatoes, five bananas, a 1kg bag of carrots, a pack of four beef mince burgers and a 250g block of tasty cheese.
This came to a total of $52.57, or $58.88 once DoorDash’s $6.31 service fee was included. I was offered free delivery on my first order.
• Sign up for Guardian Australia’s breaking news email
According to the DoorDash website, its loyalty program, DashPass, which costs $9.99 a month or $96 a year, would give me free delivery on orders over $30. Aldi would not disclose the standard delivery fees for Canberra, other than to say they are based on distance.
In Canberra, you can order from Coles on DoorDash, where a basket of 10 comparable items cost me $75.36 and from Woolworths on Uber Eats, where my basket worked out to $71.19 without any eggs, which weren’t available. Both of these totals included service fees, but not delivery.
So, if I use a third-party platform such as DoorDash to purchase from the major chains, the price increases significantly. But most shoppers would choose the supermarkets’ in-house delivery services.
Delivery fee variables
Unlike Aldi, Woolworths and Coles have built their own delivery services. Both require a minimum $50 spend to order from their websites.
My basket of 10 items came to $61.23 from the Woolworths website, and $56.17 from Coles, excluding delivery. This suggests Aldi – where my basket came to $58.88 including the DoorDash service fee – loses its usual significant discount to the major chains due to the costs associated with its third-party delivery platform.
The delivery fees are cheaper if you plan ahead, but, for the sake of comparison, I chose the fastest option possible, with Coles offering an “as soon as possible delivery option” in an estimated 64 minutes for $15.
The supermarket’s website tells me if I signed up for a Coles Plus membership – for $19 a month or $199 a year – I would be eligible for free delivery.
Woolworths also offered a $15 fast delivery in “approximately 50 minutes”. Its website tells me I would be eligible for free delivery on orders of $75 or more with a Delivery Unlimited subscription, for $15 a month or $119 a year.
The calculations change according to delivery fees, which in Aldi’s case can vary according to how far you live from a store.
The price of going online
Aldi has acknowledged the cost of running an online shopping service will affect its prices.
The total cost of an online Aldi order includes the item prices, a DoorDash markup, delivery fee and service fee, all of which are set by the delivery platform.
A spokesperson for Aldi said it was committed to being the most affordable supermarket on DoorDash but acknowledged some of its prices on the platform “may vary slightly” from those in-store.
“This reflects the added convenience of having everyday essentials delivered quickly and easily,” they said.
I visited an Aldi store in person to check out prices, bearing in mind that my local is in Melbourne, not the same store as one of those delivering from Canberra.
Most of the prices were identical, although the iceberg lettuce, eggs, bananas and potatoes were a bit cheaper in the store.
Overall, my basket cost $48 when shopping in person, saving more than $10 compared with going through the DoorDash site with its service fee.
But I also had to factor in a 25-minute round trip on the tram to get there, which comes with its own costs – or a 40-minute walk or 20-minute bike ride up and down a steep hill.
Aldi tried a similar service with a third-party delivery provider in the UK, but it didn’t last. The chain is also hesitant to build its own delivery system because that would add significant costs to the business, which would either result in higher grocery prices or less profits for its German owners.
Prof Gary Mortimer, a retail expert at the Queensland University of Technology, says Aldi has had to respond to the delivery trend.
“Online food and groceries now represent anywhere between 10 to 12% of supermarket revenue,” Mortimer says.
“As Aldi enters into that space, even using a third-party provider like DoorDash, Coles and Woolworths will be looking at how they go about defending that market share.”
Retail expert Bronwyn Thompson says Aldi considers the competitive advantage of a delivery service to be worth the additional expense.
“If they’re trying to be more of a ‘whole shop’ destination, this is part of that,” Thompson says.
“They’ve come a long way from just being a place where you’d get a few things.”
The Aldi Australia chief commercial officer, Jordan Lack, said: “We know Australians will rejoice at the news of Aldi taking our first step in offering customers this convenient shopping format”.
