🛒 The Aldi effect: is Aldi posing a big threat to Coles and Woolworths?
Few weeks ago, ABC released a video and an article discussing the growth of Aldi in Australia, and assessing whether Aldi possesses a threat to our major supermarket chains Coles and Woolworths.
There is absolutely no doubts that ever since their launch in Australian market back in 2001, Aldi is doing an amazing job delivering value to the industry and all stakeholders. Over the years, they won multiple awards as the best supermarket chain in the country, widely acknowledged by many suppliers as the best grocery chain to work with, and embraced and loved by Australian consumers for providing tangible value and doing it in a different way. Good different.
Aldi currently holds around 10.5% of the market, and is #4 grocery retailer in the country by number of stores. The list goes like this:
🟠 IGA = 1,280 stores
🟢 Woolworths = 1,112 stores
🔴 Coles = 858 stores
🔵 Aldi = 598 stores
🔵 Aldi been growing its presence in Australian market very rapidly, adding on average over 25 stores per annum since 2001. In 2016 alone, they opened an impressive 65 new stores. However, over the last 3-4 years, the pace of opening new stores has slowed down quite significantly - to a less than 6 stores per annum. It’s getting harder and harder for Aldi to find good places to open more stores, considering constraints of their supply chain and fierce competition from majors.
🔴 Meanwhile, after a decade of focusing on refurbishing existing stores more than opening new ones, over the last few years, Coles has accelerated its expansion and opening more than twice as many new stores as Aldi does. So, take the narrative of “Aldi is set to overtake Coles in the number of stores” that you hear in the video with a grain of salt.
🧮 Mathematically speaking, if we assume that both chains will continue to grow their stores footprint with the average rate of the last 25 years, it will take Aldi almost 14 years to overtake Coles. But if we take last 3-4 years as a proxi, there is no point in the future where Aldi will have more stores than Coles. Unless, of course, something changes dramatically.
Also, the narrative of Aldi having a global buying power is only half true. True for non-perishable staples, but when it comes to all fresh categories, just like every other chain, Aldi is trying to source products mostly locally. And the battleground for Australian shoppers is fresh categories.
Other than that, the video and the article provide some good insights and food for thought.
Here’s the link to the article if you want to read more - https://lnkd.in/g53ka9MY
Stay informed. 🤝
#retail #fmcg