By Richa Naidu
CHICAGO (Reuters) - Discount supermarket chain Aldi Inc [ALDIEI.UL] said on Tuesday that it was expanding its Instacart grocery delivery tie-up to 35 U.S. states from four cities in time for the start of the all-important holiday spending season.
German-owned Aldi, the world's No. 5 retailer, operates a small-store model that keeps prices down and has upended Britain's grocery market.
The company has been growing aggressively in the United States even as rivals are struggling in a drawn-out price war with Amazon.com Inc (O:AMZN).
Seeking to drive online sales, Aldi began working with Instacart Inc last year to deliver groceries in Atlanta, Chicago, Dallas and Los Angeles.
The same-day delivery program is being rolled out by the U.S. holiday of Thanksgiving in late November to 75 major U.S. markets, including San Diego, New York City and Miami, the company said.
About a fifth of Aldi purchases on Instacart are made by people who had not previously shopped at the store, Aldi U.S. Chief Executive Jason Hart said in an interview with Reuters.
"That proves that we're reaching new customers with Instacart, customers that find it inconvenient to get to local stores or maybe exclusively shop groceries online," he said. "It means more growth."
In August, the company said it was rolling out scores of new products by early 2019. Last year, Aldi began a more than $5 billion plan to remodel and expand its U.S. chain to 2,500 stores by the end of 2022 from 1,600 in June 2017.
Walmart Inc (N:WMT), Target Corp (N:TGT) and other traditional grocers have been slashing prices to win back market share from e-retailers, at odds with packaged goods companies that are struggling to keep prices low. Aldi, whose products are 90 percent private-label, is far less exposed to these tensions or price volatility.
Rival German discount grocery chain Lidl, which opened its first U.S. stores last year, has also been trying to make its mark, pricing products at up to 50 percent cheaper than competitors.