New report claims ALDI Australia has changed the supermarket war, saving shoppers millions
A new report into how ALDI has changed Australia’s supermarket war has revealed the economic impact it has had and how much it has saved shoppers. SEE HOW YOUR STATE COMPARES
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Exclusive: A new report into how ALDI has changed Australia’s supermarket war has revealed the economic impact the bargain German chain’s local expansion has had on every state, and how much it has saved shoppers.
The report titled ‘Making a Good Difference: how ALDI contributes to the Australian Economy’, which was commissioned by ALDI and undertaken by PricewaterhouseCoopers Australia, found ALDI has even saved non-ALDI customers $450 million a year on products they would normally buy.
“ALDI’s entry into Australia has driven a significant price deflation, resulting in savings for all grocery buyers,” the report stated.
“Comparative basket analysis revealed that in 2018 ALDI saved its customers across the country $2.2 billion by choosing to shop with them over the major supermarkets.
“Furthermore, ALDI had a downward force on the price of all groceries resulting in savings of $450 million for customers that chose to shop elsewhere.”
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PwC estimates ALDI has contributed almost $23 billion into the nation’s gross domestic product since it first opened two stores 18 years ago. Last year, ALDI’s operations contributed $3.2 billion to Australia’s GDP.
ALDI Australia CEO Tom Daunt told News Corp he was “really surprised” by the results.
“Shoppers who don't shop with us are benefiting in two ways, the general competitive effect we have on the market has caused other supermarkets to sharpen their pencils but we’ve also had a big impact on the type of groceries that are sold in Australia,” he said.
“We've managed to grow the private label industry in Australia from around four per cent of groceries sold when we entered the market in 2001 to almost 25 per cent today and whether people shop at ALDI or not, that’s saving grocery customers around the country a huge amount.”
Mr Daunt also said they would be more transparent in the future about their operations.
“We’re actually very happy to share what we do and all of the business practices that underpin what we do,” he said.
“We recognise the opportunity to do more of that in the future because frankly as we’ve become larger and more Australian grocery shoppers are becoming more familiar with what we do, they’re becoming more interested in how we do it.”
In response to the report’s claims about ALDI’s impact on lowering grocery prices, a Coles spokeswoman told News Corp it had lowered food and liquor prices for the ninth consecutive year in 2018, with cumulative deflation of 11.4 per cent since 2009.
“We know our customers want lower prices with great quality and service, and we are determined to provide that both today and well into the future,” she said.
“There are now more than 4000 items on Every Day pricing delivering exceptional value to customers and we employ more than 112,000 Australians.”
She said last financial year (2017/18) it launched 739 Coles Own Brand (private label) products and won 110 consumer awards.
“Coles Own Brand is overwhelmingly Australian-made,” she said.
“We have many long-term relationships with Australian producers and manufacturers to supply Coles Own Brand products and we’re proud to work with them to grow their business.”
A Woolworths spokeswoman declined to comment ahead of the company’s Q3 financial results being announced today.
NSW
The report found that in NSW, ALDI contributed more than $1.24 billion to the local economy last year.
By the end of 2018, it had 183 ALDI stores and two distribution centres last year that provide 5,366 direct jobs, leading to a state employment contribution of $471 million.
ALDI’s first Australian stores opened in Marrickville and Bankstown Airport in 2001, and its investment in local business equated to an economic contribution of $631 million, with large support of local bread and beef.
ALDI’s business partners employ 3,211 people and partnerships with ALDI have helped these businesses such as TrendPac, based in Berkeley Vale grow.
TrendPac produces ALDI products such as mouthwash, shower gel, shampoo and soap.
VICTORIA
The report found that in Victoria, ALDI contributed more than $874 million to the local economy last year.
By the end of 2018, it had 150 stores and two distribution centres that provide 3,275 direct jobs, leading to a state employment contribution of $266 million.
ALDI’s first Victorian stores opened in Heidelberg West and Chirnside Park in 2003, and this year, ALDI is refurbishing 32 Victorian stores.
Its investment in local businesses has led to an economic contribution of $520 million. ALDI’s business partners employ 6,057 Victorians and partnerships have helped businesses like Hinkler Books expand.
ALDI sales of Hinkler books has increased from $44,000 in 2002 to over $3.5 million in 2018 as a result of selling more than one million books as Special Buys in that year alone.
The partnership introduced Hinkler Books to new ALDI markets in the US and UK.
QUEENSLAND
The report found that in Queensland, ALDI contributed more than $438 million to the local economy last year.
By the end of 2018, it had 112 stores and two distribution centres that provide 2,459 direct jobs, creating a state employment contribution of $188 million.
ALDI’s first Queensland stores opened in Chermside and Salisbury in 2004. ALDI’s investment in local businesses has led to an economic contribution of $186 million.
ALDI’s business partners employ 1,246 Queenslanders and partnerships with ALDI have helped businesses like Golden Cockerel, which supplies 100 tonnes of chicken every week.
SOUTH AUSTRALIA
The report found that in South Australia, ALDI contributed more than $168 million to the local economy last year.
By the end of 2018, it had 29 stores and one distribution centre that provide 519 direct jobs, creating a state employment contribution of $43 million.
ALDI’s first stores opened in Parafield Gardens, Hallett Cove, Seaford Heights and Woodcroft in 2016 and three more stores slated to open this year, including its Blackwood, Mount Gambier and Newton stores. In 2020, ALDI will open a further six stores.
ALDI’s investment in local businesses equalled an economic contribution of $80 million. ALDI’s business partners employ 579 South Australians and partnerships with ALDI have businesses like Spring Gully Foods grow. It now provides ALDI honey, sweet spiced gherkins and pickled onions.
WESTERN AUSTRALIA
The report found that in Western Australia, ALDI contributed more than $139 million to the local economy last year.
By the end of 2018, it had 41 stores and one distribution centre in Western Australia, providing 715 direct jobs, creating a state employment contribution of $57 million.
ALDI’s first Western Australian stores opened in Belmont Forum, Kwinana, Lakeside Joondalup and The Square Mirrabooka in 2016. Three more ALDI stores are expected to open this year with two listed for Baldivis and Madeley. In 2020, ALDI will open a further five stores, including Inglewood and Innaloo.
ALDI’s investment in local businesses led an economic contribution of $84 million. ALDI’s business partners employ over 544 Western Australians and partnerships with ALDI have helped these businesses like Turkish Bakeries develop.
Originally published as New report claims ALDI Australia has changed the supermarket war, saving shoppers millions
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