Aldi loses market share for the first time on the Eastern Seaboard

German supermarket powerhouse Aldi’s growth on the eastern seaboard has gone backwards for the first time since it began trading in Australia in 2001.

CEO of Aldi Australia Tom Daunt in an Aldi store in Erskine Park, Western Sydney.

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GERMAN supermarket powerhouse Aldi’s growth on the eastern seaboard has gone backwards for the first time since it began trading in Australia in 2001.

Industry data obtained by Business Daily shows Aldi’s market share in the eastern states began to falter during the 2015-2016 financial year, despite the supermarket opening new stores. It dropped to 11.7 per cent in June, down from 12 per cent in the same month in 2015.

This is the first time its growth has hit a speed bump since opening its first store in Bankstown 15 years ago.

The data also found Aldi’s sales on the eastern seaboard grew by just 0.4 per cent during June compared with June 2015 — slower than the overall market growth of 3 per cent over the same period. This suggests Aldi’s market share may have hit the ceiling in NSW, Victoria and Queensland, which will no doubt leave rivals Coles, Woolworths and Metcash feeling gleeful.

Since arriving Down Under, the German discount retail chain, which is led in Australia by Tom Daunt, has aggressively expanded its stores and now has more than 400 across the country.

According to a recent report by investment bank UBS, in the medium term Aldi is targeting a total of 500 stores down the east coast of Australia as well as 130 in South Australia and Western Australia.

Aldi’s growth on the eastern seaboard has decreased for the first time.

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Aldi differentiates itself from its rivals by offering a much narrower variety of products and far more private label items at low prices. In order to compete, Woolworths, Coles, and to a lesser extent Metcash, have invested heavily in price reductions. This has had a severe impact on Woolworths’ bottom line in particular.

Data company Nielsen confirmed Aldi did have a marginal decline during the month of June. A spokeswoman could find no other four-week period over the previous year showing such declines by the retailer.

An Aldi spokeswoman initially said Aldi “had never had a decline in market share on either the eastern seaboard or nationally”, but retracted this once Nielsen confirmed its statistics.

Nielsen’s head of retailer services, Megan Treston, said that on a quarterly basis Aldi was still growing both in terms of value sales and new households visiting stores.

“For as far back as I can recall, Aldi has had consistent quarter-on-quarter value growth across the Australian eastern seaboard,” she told Business Daily yesterday.