As Aldi’s WA invasion gathers steam, local retailers say they welcome the competition from the German discount juggernaut.
Already entrenched as Australia’s third-largest grocery retailer, Aldi will open its first Perth stores next month and has planned to have 20 open by year’s end.
Aldi’s business model involves smaller stores stocking a smaller range of products (around 900), thereby saving on rent and passing those cost cuts onto consumers.
Since it opened its first Australian store in January 2001, Aldi has taken the east coast by storm and now occupies 12.1 per cent of Australia’s supermarket space – developing a cult-like following among its legions of devotees.
Woolworths are still the market leader, with 37.3 per cent, while Coles has 32.5 per cent.
IGA holds on to 9.7 per cent market share.
In the past three years, Aldi Australia has taken its annual sales past $8 billion, and the push into WA is part of the retailer’s plan to boost store numbers from 373 to 628 by 2020.
With new Aldi outlets set to open in Mirrabooka, Kwinana, Belmont and Joondalup, the WA grocery sector is set for its biggest shake-up in years.
But Grant Ramage, WA General Manager of Metcash Food and Grocery Supermarkets, owner of the IGA brand, said his organisation welcomed the arrival.
“We think competition is good for shoppers in WA,” Mr Ramage said.
“We’re feeling very confident going into this campaign. We’ve been working very hard to make sure we’re delivering great value.
“A big part of what IGA does is to really focus on tailoring the offer to the needs of individual groups of customers and individual communities.
“Our stores are all owned by WA families.
“That really gives them a unique position in their communities.”
James Kelly, who owns the Taylor Road IGA in Nedlands and the Second Avenue store in Mount Lawley, said the group’s local focus set it apart.
“We look after the local, West Australian growers and farmers,” Mr Kelly said.
“We’re very parochial, as West Australians are, and we live off that.”
Woolworths, too, is unfazed by Aldi’s imminent arrival.
“Woolworths always welcomes competition,” a spokesman for the company said.
“Woolworths is focused on putting our best foot forward every time, irrespective of what our competitors do.
“We have invested more than $400 million since early last year in lowering prices across our supermarkets, which means our customers can be confident they can pick up their favourite items at a great price both in store and online.”
Coles was approached for comment but a spokesman said they had a position of not commenting on competitors.