The company feared e-commerce could impact the cost structure and prevent the company from providing value for customers.
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Supermarket chain Aldi has dropped its plan to expand into online shopping believing it might affect its ability to continue providing low-cost products for customers.
The company dismantled its online team late last year following serious consideration, according to Jordan Lack, Aldi MD of buying.
“The greater concern is the impact on cost structure as fundamentally keeping our costs low has a direct impact on the prices we can offer our customers,” he told the Australian Financial Review.
Lack stressed that the company prioritises value over convenience as price plays a great importance to consumers.
Last month, consumer group Choice said Aldi was $17 cheaper for a basket of 14 grocery items compared to Woolworths and Coles.
In addition, offering online shopping would also create more complexity given Aldi is still building warehouses and an automated distribution centre, Lack stated.
Instead, the retailer is considering new products while targeting growth corridors on the outskirts of major cities and growing sales at its existing 570 stores.
“There was 5.1 per cent growth in new households shopping with Aldi in the last three months,” Lack told the AFR. “Customers are coming for price, but we are holding them because of quality. We are aiming to get more shoppers to come to Aldi as their first stop.”
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