SHOPPERS’ CHOICES CHANGE AS ECONOMIC LANDSCAPE SHIFTS
ALDI chief executive Tom Daunt has observed a shift in consumer sentiment in recent months.
As steeper interest rates take their toll and house prices fall, consumers are making wiser choices about how they spend their limited household budgets.
“I think we’ve observed a real turn in consumer sentiment the last three or four months,” Mr Daunt said. “Obviously, interest rates are a real bellwether for how consumers feel, when housing prices start to move around it has a real wealth effect, both perceived and real, and that impacts choices. So we have definitely started to see consumers more interested in looking after the pennies and the pounds than they perhaps were over the last year or so.”
Aldi, which has 583 stores across Australia, is also facing increasing pressure from suppliers to lift prices to cope with soaring inflation.
Mr Daunt revealed that over the past financial year Aldi was approached by suppliers to ratchet up prices, sometimes receiving multiple requests for price hikes, much like his competitors at Woolworths and Coles.
“We had about 1200 price increase requests and that‘s almost fivefold what we would see normally,” Daunt said. “So we have accepted around 80 per cent of those price increases from suppliers, and we have immediately accepted those without debate or alteration.
“And when times are difficult like they are now we can play our part as a retailer and make sure that our suppliers can continue to operate profitably. And you know when times are the other way around, they can pass cost savings on to us and we can pass them through to the customer.”
But Mr Daunt said Aldi wouldn’t change its methods because of the challenges. “We have three company values: simplicity, consistency and responsibility,” he said.