Dive Brief:

• Aldi is now accepting Apple Pay, Android Pay and all other forms of contactless payment at all of its nearly 1,700 stores nationwide, according to a company statement.
• “We’re continually innovating to provide our customers a faster, more efficient shopping experience that saves them time and money,” Jason Hart CEO of Aldi U.S. said in the statement. “Shoppers love ALDI because we build and run stores they can shop quickly. Contactless payment makes shopping at ALDI that much faster and more convenient.”
• The move is Aldi’s latest technology-oriented effort aimed at providing more convenience solutions for consumers. Aldi partnered with Instacart earlier this year to test home delivery in select markets.

Dive Insight:

In addition to being low-price leader with a carefully curated assortment inside just 12,000 square feet of store space, Aldi strives to be the premier small-box alternative for shoppers seeking a quick, in-and-out grocery experience. Just before Lidl opened its first U.S. stores this summer, Aldi made its intentions to dominate the nation’s hard discounting sector clear. The retailer announced plans to spend more than $5 billion in the next five years to add about 900 new stores and remodel existing units.

"Aldi wants to be the company to bring hard discount grocery shopping into the mainstream," Tim Barret, senior research analyst with Euromonitor, recently told Food Dive. With its trial of home delivery via Instacart, the retailer is taking steps to make shopping more convenient. Now, its move to accept ApplePay illustrates the retailer’s latest effort to speed up the checkout process and provide even more shopping convenience.

For a retailer that held out for years before finally accepting credit cards in its stores in 2016, this is a pretty progressive move. But think about the savings to be had should Aldi be able to move shoppers to a contactless payment solution like ApplePay over traditional credit and debit cards, where retailers typically get charged a 2-3% usage fee by financial institutions. The retailer could cycle this cost-savings back into the business and turn out even lower prices.

The way Aldi has quickly entrenched itself as an everyday shopping option and pulled huge market share in the UK should be a lesson for U.S. grocers to watch out. One need only look at Britain’s grocery wars to understand the devastation that could be wrought by Aldi and Lidl. To compete with those chains, Wal-Mart’s Asda U.K. grocery unit and rival supermarkets Sainsbury, Tesco and Morrisons have been slashing prices to neutralize the German threat. U.S. retailers too could be in for the battle of their lives, particularly as price wars among the hard discounters, Walmart, Target, Kroger and others continue to exert pricing pressure throughout the industry.