Aldi Stores Supermarkets Pty Ltd
Aldi Stores Supermarkets Pty Ltd - Retailing - Australia-Dissertation Writing Help
Strategic Direction
·
As the only discounter in
Australia, Aldi targets budget-conscious consumers with a focus on essential
household groceries and necessities. The company plans to further expand in
Australia through smaller outlets and in suburban neighbourhoods over the
forecast period.
Key Facts
|
Address:
|
1 Sargents
Rd, Minchinbury, New South Wales 2770, Australia
|
|
Tel:
|
+61 (02)
9675 9000
|
|
Fax:
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+61 (02)
9675 9371
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|
www:
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aldi.com.au
|
|
Retail
formats/channels:
|
Discounters
|
|
Retail
brands:
|
Aldi
|
Source: Euromonitor International from
company reports, trade press (including The Age, Retail World, etc)
|
|
2007
|
2008
|
|
Year end
December
|
|
|
|
Net sales 1
A$ million
|
1,548.6
|
1,765.5
|
|
Outlets 1
|
163
|
186
|
|
Selling
space 1 (‘000 square meters)
|
153.1
|
173.7
|
|
Sales of
grocery (%)
|
59.2
|
59.2
|
Source: Euromonitor International from
company reports, trade press (includes The Age, Retail World, etc)
Note: 1 Euromonitor International
estimates; annualised figures
Company Background
·
Aldi Stores Supermarkets Pty
Ltd, a subsidiary of the German Aldi Group, harboured bold ambitions when it
entered the Australian retailing market in 2001. Sensing latent demand for a
low-priced discounters format in the country, it tested the waters with the
relatively low-key opening of two small outlets in Sydney. Outlet growth
subsequently boomed.
·
Aldi’s core business is grocery
retailing. The company also stocks limited non-grocery items, such as consumer
electronics, housewares, clothing and sports goods to interest customers. These
products are only offered until stocks run out.
·
As a discounter, the company’s
business model enables it to streamline costs to enable it to deliver the
cheapest price to the consumer without quality suffering. Aldi’s ability to
offer unbeatable low prices stems from bulk purchasing of a narrow number of
SKUs (stock keeping units). It targets budget-conscious shoppers with a focus
on essential household groceries.
·
Aldi is the first among the
grocery retailers to introduce unit pricing of its products, allowing customers
to compare the average prices of comparable in-store products. It has also
guarantees that prices of its products excluding fresh produce and bakery items
are identical throughout all its stores in Australia. This is unique in grocery
retailing in Australia, which the other grocery retailers have criticised of
higher pricing in more affluent suburban areas.
·
Aldi is present in Australian
Capital Territory, New South Wales, Queensland and Victoria.
Private Label
·
Private label products
represent Aldi’s business model. Unlike other grocery retailers, which carry a
majority of branded items, the company’s assortment is almost exclusively
comprised of private label products.
·
By dealing almost exclusively
in private label products and limiting its entire assortment to around 700
items, Aldi is able to negotiate bulk purchase deals with suppliers. The
company works closely with suppliers to simplify packaging of its private label
products as much as possible.
·
Aldi has also introduced an
organic line of daily essentials to its private label range, which are
competitively priced for such offerings. The organic range caters to an
additional value-conscious customer demographic seeking healthy grocery
alternatives.
|
Private
Label Brand
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Sector(s)
|
Comments
|
|
Aldi
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Various
(such as coffee, soft drinks)
|
Budget
|
|
Just
Organic
|
Pasta,
sauces, yoghurt, tea, etc
|
Budget
|
Source: Euromonitor International from
company reports, trade press (includes the Age, Retail World)
Competitive Positioning
·
Aldi’s operations in Australia
replicate the business model of its German parent company, which has been
accredited with revolutionising grocery retailing by offering high-quality
products at affordably low prices – a proposition that was not previously
viable. As a discounter chain, Aldi has successfully carved out niche
positioning for itself in Australia, as the only hard discounter chain
predominantly in grocery retailing.
·
Aldi has increased its value
share in grocery retailing over the review period. In 2008 Aldi remained the
fourth placed grocery retailer in the country.
·
Aldi has lagged behind its
initial aggressive store roll-out and plans of attaining 1,000 outlets in
Australia, with annual goals of opening up to 40 outlets annually. With new
competitor Costco entering the discounters environment, Aldi will need to speed
up its store opening programme to continue to increase its value share.
·
The company’s unique strategy
of consistent pricing across all outlets has enabled it to foster consumer
loyalty as shoppers are increasingly looking for value-conscious grocery
alternatives. Its unit pricing has also been commended by the ACCC, in allowing
consumers to make educated choices in their grocery purchases.
·
Being a foreign-owned company,
Aldi is conscious of its German identity, as consumers tend to favour local
retailers. As a result, the company has a strategic policy to create alliances
with Australian manufacturers. Aldi also emphasises that it sources local
produce and supports Australian farmers.
·
With the tightening of the
economy, Aldi is in a good position as the only discounter to grow its value
share among grocery retailers.
|
Channel
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Value share
(%)
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Rank
|
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Retailing
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0.9
|
8
|
|
Discounters
|
100.0
|
1
|
Source: Euromonitor International from trade
press (includes The Age, Retail World), company reports, trade interviews
