Aldi to overhaul fresh food, refurbish stores

ALDI will overhaul all of its Australian stores over the next four years as it revamps its fresh food offering to compete with Coles and Woolworths.

ALDI will overhaul all of its Australian stores over the next four years as it revamps its fresh food offering to compete with Coles and Woolworths.

The German discount chain has revealed record sales of $5.8 billion in calendar 2014, an increase of nearly $1 billion on the previous year, with pre-tax earnings of $238.5 million.

Aldi says it is reinvesting all profits in its Australian operations, with the focus on store refurbishments and extensions, new store openings and centralising produce buying.

The supermarket says the decision to centralise its produce purchasing, which is currently done state by state, will mean “better quality produce for our customers”.

“The new centralised fruit and vegetable purchasing model, which will roll out by mid-2017, will further improve our strategic relationships with suppliers to focus on long-term, flexible contracts that suit the grower, product, season and conditions,” an Aldi spokeswoman said.

The updated store format, which was trialled during 2016, will roll out to all existing and new stores by 2020. The new format features clearer signage, redesigned shelving, expanded wooden produce bays, LED lighting and extended chillers.

“This will allow for a more pleasant and efficient shopping experience, while also catering for an expanded range across our fresh meat, produce and health categories,” the company said in a statement.

On its expansion plans, Aldi said it had opened more than 100 new stores and three distribution centres over the past two years. “Most recently, this can be witnessed by Aldi’s expansion into SA and WA. This expansion project has an associated investment of over $700 million which will culminate in as many as 120 new Aldi stores and over 2000 new jobs for the states of SA and WA,” the company said.

The company currently has around 450 stores nationally. Aldi said its expansion into SA and WA had been “extremely successful” in attracting new customers. In the first quarter of trading, 27.1 per cent of grocery buyers in SA made a purchase at an Aldi store, while 18.3 per cent made a purchase in the first five weeks in WA.

“To date, our expansion has captured 3.2 per cent market share in South Australia and 2.3 per cent in Western Australia, with increased competition benefiting consumers and suppliers,” Aldi said.

“This is a testament to the positive impact ALDI has made in the community and the strong appetite among consumers for an alternative place to shop.”

Aldi Australia chief executive Tom Daunt told The Australian he expected the company’s market share to grow from just under 10 per cent currently to 15 per cent within a few years, and was committed to remaining 25 per cent cheaper than the major supermarkets despite significant price investment.

“I would expect in the years to come that [east coast] growth will slow down a little bit as our store network increases,” Mr Daunt said.

“I know our competitors think differently, but we are really not here to conquer the world, and we just want a ­sustainable, profitable, solid business that enables us to deliver ongoing value to our customers.”