Aldi is arguably one of the biggest disruptors to hit the Australian economy over the past 20 years, single handedly busting open the Woolworths/Coles supermarket duopoly.
Aldi now has 570 stores nationwide, capturing a 10% market share, and is expected to open another 20 stores this year. In the process, Aldi has expanded its footprint beyond Australia’s east to all states and territories, other than Tasmania and the Northern Territory.
Aldi’s sales are also booming, growing by 10% to around $10.5 billion 2020.
Aldi Australia’s CEO Tom Daunt says the supermarket group has “dramatically changed the retail landscape” and claims that Aldi has saved Australian consumers some $6.6 billion since it opened via its competitive pressure and lower prices:
“It feels like it has gone very quickly, but we have dramatically changed the retail landscape in that time and I think that is recognised by all market observers including our owners who came to Australia with fairly modest expectations, and a somewhat quirky and different kind of grocery store”…
Morgan Stanley previously estimated that Aldi operates on an 18% price discount to Coles/Woolworths and expected Aldi store numbers to rise to 800 stores and its market share to grow to 15% by the mid-2020s.
I have been a regular Aldi shopper since 2003 when I lived in Canberra.
In addition to its competitive prices and good product quality, I like the simplicity of Aldi.
Having a small footprint and limited product choice makes shopping quick and easy. Products are always in the same spot irrespective of store, making them easy to find.
By contrast, I find Woolworths and Coles too large and confusing, and I often waste time wandering aisles trying to find what I need.
Whether you are a fan of Aldi or not, one cannot deny that the competitive pressure applied to Woolworths and Coles was needed and has helped drive down costs for consumers.
Hopefully Aldi will expand into Tasmania and the Northern Territory, providing those households with the same competition benefits.