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Australia: Aldi keeps on growing

Supermarket giant Aldi is continuing its push across Australia with the launch of a new ‘Good Different’ campaign nationwide. The campaign comes as Aldi revealed it has continued to reduce prices in the first quarter of the year and has spent an annualised $75 million on reducing prices.

Aldi’s share of Australia’s $90 billion supermarket budget continues to grow, new supermarket expenditure data shows. Since Roy Morgan last revealed the state of Australia’s grocery market six months ago, Aldi has continued to increase its market share, while Coles is steady and both Woolworths and IGA have declined.

The latest Supermarket Currency report from Roy Morgan Research shows Australia’s grocery buyers spent $90.3 billion at supermarkets during the 12 months to March 2017. Of that, $32.2 billion was spent at Woolworths (35.7% of the market, down from 36.3% in the year to September 2016) and $30.0 billion at Coles (33.2%, unchanged).

Aldi claimed $11.9 billion of grocery buyers’ expenditure during the year (13.2%, up from 12.5%), stretching its lead over IGA which fell to $8.4 billion (9.3%, down from 9.8%).

Aldi is hopeful that the new campaign will help attract more customers to its stores, with Aldi Australia CEO Tom Daunt saying it highlights that the chain is not like other supermarkets. “Good Different is a new, better way to describe to our customers how we do things. We are not like other supermarkets,” Daunt said.

“There is a lot of noise around price at the moment and a lot of that noise tends to be dictated by the activities of the major supermarket players and what they do. The reality for us is we have been pursuing a long-term strategy of growing consistently and sustainably.”

“So it doesn’t really matter in the market how noisy it gets around price, we continue to steadily and incrementally grow and will pass those benefits back to our customers in ever increasing value.”

Although Daunt admitted that Aldi’s $75 million investment does not sound as impressive as the hundreds of millions that Woolworths and Coles have put into cutting their prices, he said that given the size of Aldi and its low price starting point, its discounts are significant.

He explains: “In 2016, we reduced prices on almost half of the products in our core range. That’s over 600 core range items. Some products were reduced by over 30%.”

Aldi has and always will be the price leader, says Daunt, “this is our core competitive advantage and that is something we can’t give up.”

As Aldi continues its expansion programme, particularly in South Australia and Western Australia, Daunt said he was confident that the supermarket would once again see double-digit sales growth for this year, adding to the 12% sales growth it achieved in 2016.