Aldi’s performance being aced by Woolworths

THE Aldi steamroller is finally starting to slow as Woolworths gets its mojo back and IGA falls by the wayside, a survey of supermarket shoppers has found.

A report says Aldi has lost ground in terms of overall price perception over the past year.

THE Aldi steamroller is finally starting to slow as Woolworths gets its mojo back and IGA falls by the wayside, a survey of supermarket shoppers has found.

The heat is coming out of the supermarket price wars, according to analysts at investment bank UBS, with “signs of a more rational market” beginning to emerge.

The study of the nation’s $105 billion supermarket sector suggests Aldi is losing momentum in its key east coast markets it focuses on opening stores in South Australia and Western Australia and as Woolies lures back shoppers.

“Aldi is finding it increasingly hard to gain new main shoppers from competitors,” analyst Ben Gilbert said.

The report found Aldi lost ground in terms of overall price perception over the past year as Woolworths and Coles shifted a greater range of goods to low price models.

Mr Gilbert said while growth at Aldi was slowing, store refurbishments planned for Victoria and NSW were set to rejuvenate customer interest during the year ahead.

More than 1000 supermarket shoppers were polled at the end of February for UBS and results were compared to the same survey a year earlier.

The biggest improver has been Woolworths, which has gained ground in shopper traffic, spending and overall value perception among customers, but key rival Coles remains well ahead on all counts.

The big loser remains Metcash-backed IGA, which is being hammered on all fronts.

“We see IGA as structurally challenged,” Mr Gilbert said.

“While price positioning and differentiation aids in stemming share loss, IGA’s medium-long term outlook, in our view, is weak.”

The sector last year posted its lowest rate of annual growth in more than two decades as major players gave up profits to pour money into lowering prices. Woolies and Coles both quietly raised meat prices over the past month.