Aldi is the latest supermarket chain to announce a sustainability push – an effort the company says will help it trim costs and stand out in a crowded field.

The low-cost grocer, known for its spartan approach to retailing, plans to make all of its private-label packaging reusable, recyclable or compostable by 2025, while cutting packing materials for those products by 15 percent over the same period.

Aldi U.S. Chief Executive Officer Jason Hart said cutting plastics and packaging will bring in more environmentally conscious shoppers and reduce supply chain expenses after an initial short-term investment in making the change.

“We know our customers care,” he said in an interview. “More and more, I get questions about: Is there anything we can do to reduce the amount of packaging for our products?”

Aldi has always charged shoppers for bags – which encourages consumers to bring their own. Their use is coming under fire across the U.S. as plastic waste fills the world’s waterways. New York lawmakers recently approved a ban on single-use plastic bags, forcing residents to pay for paper ones or re-use their own during store visits. As consumer awareness grows, more restaurants and retailers have come out with plans to curtail the use of plastics and use more eco-friendly materials.

Meanwhile, Aldi is continuing its aggressive U.S. expansion. It plans to open 130 new locations this year, which will bring its store count there to nearly 2,000.

That growth, coupled with the arrival of fellow German discount chain Lidl, has helped to pressure margins of U.S. grocery retailers in recent years. Competition appears to be further intensifying: Earlier this week, Amazon.com Inc. announced price cuts at Whole Foods Market, the natural-foods seller that it acquired in 2017.

Companies are also grappling with rising demand for grocery delivery – a complex and expensive endeavor. Aldi’s deliveries, which are carried out via a partnership with Instacart Inc., are performing above company forecasts, Hart said. The next challenge, he added, is cutting waste on those orders.

“Home delivery uses more packaging,” Hart said. “We haven’t fixed it – it’s something we’re working on.”


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