Aldi growth Downunder firmly west of Tasman

Discount German supermarket giant Aldi’s big Australian expansion will not see it branch out into New Zealand. A statement by the company indicated its big drive across the Tasman should not be read as any indication of plans to open here.

The business has about 340 stores in Australia’s eastern states and is estimated to have 10 per cent of that country’s A$88 billion ($90 billion) food and grocery market.

In Australia, the business is being seen as challenging the country’s cosy duopoly between Coles and Woolworths.

Aldi opened in Australia in 2001 and has grown rapidly since then.

“Now with over 300 stores successfully operating across New South Wales, ACT, Queensland and Victoria, it’s clear that Australian shoppers have adopted the company’s philosophy of great value for all consumers,” the company said. “Aldi is happy to announce that over the next few years it will be expanding our operations into Western Australia and South Australia.”

The chain’s philosophy is to sell the highest quality goods at the lowest possible prices and it now has more than 7000 stores worldwide, having started in Essen, Germany in 1913.

Australian-owned Countdown is on a big expansion throughout New Zealand, along with locally-owned cooperative Foodstuffs.

One Auckland retail executive said Aldi would have to invest substantial capital here to start trading.

“Think two islands, two distribution hubs at least, with frozen, chilled, fresh, fish, meat and ambient distribution centres at each hub. That’s five to six big warehouses. Then you have to buy sites to gain critical mass. For the first 10 years they would take a hammering.

“It’s fiercely competitive here and there is no doubt that they are nervous about jumping into that space, particularly for a country of only 4.3 million people.”