Why do Australians love Aldi? The secrets to the supermarket’s phenomenal success
November 23, 2014
News.com.au
IT’S the story of an unlikely underdog that rose from nothing to take on two giants.
In a country where Coles and Woolworths have dominated the retail market and our lives for years, a German discount supermarket is now forcing them into a corner.
These are the secrets behind Aldi’s phenomenal success in Australia.
Many shoppers see Aldi as a refreshing alternative to Coles and Woolworths.
THE LITTLE GUY
Since it opened in 2001, the retailer has grown like wildfire, and it now sits just behind the big two, having reached “critical mass” — the holy grail of 350 stores and $A4.03 billion in sales.
Shoppers have embraced Aldi’s low prices and alternative brands, and even better, its popularity is driving down prices elsewhere too.
Brian Walker, an expert from Retail Doctor, believes the core of the supermarket’s appeal lies in our affection for a have-a-go hero.
“I think we have empathy for the challenger,” he told news.com.au.
Incredibly, as much as 80 cents of every dollar spent in Australia goes to a Coles- or Woolworths-owned business.
But a cultural shift is taking place, as we grow tired of traditional shopping experiences and more accepting of bargain-hunting.
Even Aldi cites the Woolies-Coles duopoly as part of the reason for the German chain’s popularity in Australia.
“There are more players and greater competition in other markets,” a spokesperson told news.com.au.
“In Britain for example, the top five chains share in 70 per cent of total supermarket sales. Comparatively, Woolworths and Coles have a similar market share here in Australia.”
Exceptional value is the key to the German retailer’s success.
SIMPLE SAVINGS
Aldi is openly value-focused, an attitude that Australians have embraced since the global financial crisis.
The growth of online shopping and price comparison sites have also made it much harder for supermarkets to get away with ripping us off.
“It’s no coincidence, when you look at the growth of online and transparency in prices,” Mr Walker said.
“It’s top-down from Woolies and Coles, but Aldi is always upfront.”
A Choice supermarket survey in November 2009 found Aldi was 25 per cent cheaper than its nearest priced competitor, and the ACCC Grocery Inquiry in 2008 showed that major supermarket chains reduce their prices in locations where Aldi is present.
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