Aldi beefs up product range

ALDI is beefing up its product range and investing hundreds of millions of dollars in refurbishing its ageing stores as it attempts to regain momentum.

Aldi Kwinana. Picture: Daniel Wilkins

ALDI is beefing up its product range and investing hundreds of millions of dollars in refurbishing its ageing East Coast stores as it attempts to regain stalling momentum.

The German discounter, which investment bank UBS says is losing steam in the face of a resurgent Woolworths, plans to have all of its nearly 470 stores around the country refurbished by 2020.

The updated store format, which was trialled during 2016, features clearer signage, redesigned shelving, expanded wooden produce bays, LED lighting and extended chillers. Aldi currently operates 466 stores, with many of the newer ones already in the modern format.

The new stores will feature Aldi’s “fresh” new logo, revealed last month — its first significant branding change since the supermarket opened its first Australian store in 2001.

A report on Nine’s A Current Affair put the estimated cost of the refurbishment at $1 billion — but Aldi, which makes $6.5 billion in revenue a year — would not confirm that figure.

Going against the grain, Aldi has confirmed it is increasing the number of products it stocks. The supermarket traditionally stocks just 1350 product lines, compared with between 20,000-25,000 at Coles and Woolworths.

Both major supermarkets are attempting to reduce that number to cut costs and increase profits through higher-margin private label products, which now make up about 25 per cent of all groceries sold, according to IBISWorld. Last year, Coles said it was looking to cut its range by a further 15 per cent over the next three years.

An Aldi spokeswoman said the discounter had already added 100 new products in the past two years, bringing its total to 1450, and there is speculation it could add up to another 200 products. “It’s our job to ensure we continue to evolve and adapt our product offering to meet the needs of tomorrow’s shopper,” she said.

“Over the past two years, we have expanded our everyday product range by almost 100 new products, across a range of categories, including fresh produce, fresh meat, organic food and healthy options.

“We will continue to add new exciting products to our range, with national store refurbishment plans allowing for greater space to accommodate popular categories.”

She said more than 90 per cent of Aldi’s range consisted of its own brands, along with a “small number of iconic brands that we know Australian shoppers love”.

“Over the course of the year we engage with more than 1000 suppliers, the majority of whom are Australian and have enjoyed growth and success as we have expanded,” she 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.

“Aldi’s continued growth across Australia will result in increased volumes for these suppliers, as well as opportunities for new suppliers to partner with us. 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.”

It comes after two former employees claim punishing quotas were the reason for Aldi’s “industry-leading efficiency” and 40 per cent faster check-outs. The former employees said they faced the sack if they didn’t scan at least 1000 items per hour — claims the supermarket denied.

Aldi is now the nation’s third-biggest supermarket with an 8.9 per cent share of the $105.3 billion grocery market, according to IBISWorld. Woolworths holds 33.6 per cent, Coles 29.3 per cent, and IGA 7.1 per cent.

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