Why has Aldi scrapped its click-and-collect service?

Supermarket chain Aldi has announced that it is axing its popular click-and-collect service at the end of this week. 

This comes after the supermarket stopped its wine and spirits delivery in January 2023, while home deliveries of its “Specialbuys” were also discontinued last year.

But, while Aldi has retained its crown for being the cheapest supermarket, could this latest closure be correlated with the rising inflation in groceries?

The end of Aldi’s click-and-collect service

Aldi first introduced its click-and-collect service in September 2020. But, despite its four-year run, the supermarket giant announced that it would close this service on August 18th.

While this news may be disappointing for customers, the company stated that click-and-collect had been under review continuously and that its closure was to maintain cheap prices for customers.

A spokesperson for Aldi said: “At Aldi, our focus is on providing customers with high-quality products at the lowest possible prices. One of the ways we keep our prices low for customers is by running the most efficient supermarket business in Britain.

“As a result, we’ve made the decision to bring our click-and-collect service to an end, so we can focus on doing just that,”

While customers have expressed their frustration over this announcement – from complaints of losing convenience and concerns over elderly and disabled shoppers – the company has steadily been ditching its online operations.

Aldi ended its partnership trial with Deliveroo in January 2022. The following year, it stopped home deliveries of its “Specialbuys”, followed by its wine and spirits delivery a few months later.

With more focus on its brick-and-mortar stores, the supermarket unveiled plans to open four new London stores by the end of 2024, as part of its plans to open another 100 stores within the city. It also shared its long term goals of opening 1,500 stores, investing £550 million into its expansion.

While Aldi was reported as the cheapest UK supermarket by Which?, customers had to pay an extra charge of £4.99 to have their shopping brought to them at their local click-and-collect store as part of the service. That’s a significant amount considering the UK’s cost of living crisis and inflation in grocery shopping prices, including among ‘budget’ food lines.

A study by the Institute for Fiscal Studies (IFS) has revealed that price rises over recent years were more pronounced for budget foods than for expensive varieties. Britain’s poorest houses were hit the hardest by “cheapflation” during the height of the cost of living crisis between 2021-2023. Less well-off households paid 29.1% more for groceries, compared to a 23.5% increase for wealthier households.

Grocery price inflation rises for first time in 17 months

Aldi’s announcement comes as the UK’s grocery inflation increased for the first time since March 2023, according to data by Kantar – remaining at 1.8% in the four weeks to August 4th compared to 1.6% in the previous four-week period.

Research by the Office of National Statistics revealed that items like bread, cereals, fish and vegetables had dropped in price. However, there were higher contributions from other food items – particularly individual cakes, sliced pre-packed ham, milk and large chocolate bars.

Fraser McKevitt, Head of Retail and Consumer Insights, commented: “Having reached the lowest rate in almost three years in July, August saw inflation nudge up again slightly.

“While this is noticeable following 17 straight months of falling rates, it actually marks a return to the average levels seen in the five years before the start of the cost of living crisis.”

However, the Bank of England warns that we’re not out of the woods yet, with predictions that inflation will increase to around 2.7% in the second half of 2024, most notably due to price rises in the service sector and wage growth across the job market. Catherine Mann, a member of the Monetary Policy Committee at BOE, commented that the UK shouldn’t be “seduced” into thinking that inflation will stay low for the remainder of the year.

Aldi’s discard of its click-and-collect service may have been carried out with price convenience in mind, particularly during a time of grocery inflation. But with frustrated customers missing out on its convenience and data suggesting that prices were higher for budget items, it begs the question of whether this will truly be beneficial for shoppers, or for the brand’s customer relationships in the long run.