Home World Business Aldi boosts range to win bigger share of $90 billion grocery shop

Aldi boosts range to win bigger share of $90 billion grocery shop

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Aldi plans to boost its grocery selection by close to one fifth as the German discounter chases a bigger share of Australia’s $90 billion grocery market and fends off any fresh competition.

Suppliers report Aldi plans to add as many as 250 products to its range of about 1450 items in a bid to rapidly expand its 10 per cent stake in the nation’s grocery spend and claw back its rapid sales growth rate in its established east coast markets.

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Aldi’s range is still only a fraction of the size of the major supermarkets’ selection, with an average Coles or Woolworths store ranging as many as 25,000 lines.

However, Australia’s supermarket duopoly is moving in the opposite direction to Aldi, cutting their selections of branded products to reduce the cost of doing business at the cost of choice for shoppers.

Aldi is testing new branded products in its mature east coat sectors and it has told suppliers these will be rolled out nationally if they prove popular before being converted into new private label lines for the chain.

More than 90 per cent of of Aldi product lines are the discounter’s exclusive private label brands, however it also stocks a small range of branded grocery items in popular categories such as snack foods and biscuits.

Aldi reports it has already added 100 products to its range in the past two years, including additions to its fresh produce categories such as meat and organic produce.

An Aldi  spokespersonsaid the chain’s continued growth across Australia would result in increased volumes for its suppliers as well as opportunities for new suppliers.

Aldi plans to significantly expand its range of groceries. Aldi plans to significantly expand its range of groceries. 

“We need a broad range of high-calibre Australian suppliers to help cater to our expanding range of products and existing everyday range of exclusive brands,” the spokesperson said.

“For many suppliers Aldi’s streamlined processes and timely, high-volume orders provide security, giving them greater confidence to invest in their own businesses.”

More than 90 per cent of of Aldi product lines are the discounter's exclusive private label brands. More than 90 per cent of of Aldi product lines are the discounter’s exclusive private label brands. Photo: Steven Siewert

One supplier, who would only talk on the condition of anonymity, said the expansion of Aldi’s product range meant it was less leveraged to the major chains and their aggressive price promotions.

Market watchers also suggest Aldi is broadening its range to fend off the likely launch of superstore chain Kaufland and Lidl, which has already engaged with suppliers and the Victorian government over setting up shop in Australia.

Aldi will open at least 25 new stores a year in the eastern states. Aldi will open at least 25 new stores a year in the eastern states. Photo: David Mariuz

Retail analysts claim Aldi’s product expansion fits in with its upgrade plans for the east coast store network, estimated to be costing it between $500 million and $1 billion in coming years.

Aldi will also open at least 25 stores a year in the eastern states and continue to expand in the new territories of WA and South Australia.

There are also plans to unveil a new corporate identify for Aldi’s Australian market, which is understood to be the chain’s fastest growing international territory.

The makeover of Aldi’s eastern seaboard stores is a strategy to reinvigorate sales growth in these mature markets and win over new shoppers with a larger selection of fresh produce and frozen lines.

In a number of popular grocery categories Coles and Woolworths have cut their selection to the top-selling brand plus a private label product.

Coles boss John Durkan revealed plans to cut Coles’ product lines by as much as 15 per cent in 2016, prompting Woolworths to market itself as the grocery house of brands for Australian shoppers.

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