The discount retailer opened its first two stores 20 years ago today in Sydney and today it has over 560 stores trading across the country.
Part of the Australian grocery fabric
When Aldi brought its highly differentiated operating model to Australia on 25 January 2001, many could not have predicted the success that the retailer would have over the next 20 years. Rising to become Australia’s fourth largest grocery retailer and a strong network of stores across six of Australia’s major states and territories. Its every day low price model, Special Buy promotions, strong private label ranges and German efficiency are now a firm part of the Australian grocery landscape. As in other markets it has also done a fantastic job of localising its operations, supporting Australian suppliers and driving innovation tailored to the market.
A shift in the competitive landscape
As Aldi has grown, Coles, Woolworths and Metcash have all had to adapt and respond to the challenges. Price competition has grown across the market, as has private label penetration, as retailers have increased innovation in this area and expanded ranges. I am sure the teams in charge of Coles in 2001 would not have foreseen its private label penetration hitting 30% of sales from low single digits at the time and it launching its own ‘Best Buys’ promotion, a similar bi-weekly promotion to Aldi’s, which it introduced in November 2020.
What does the future look like?
Aldi has consistently driven double digit growth in Australia since it entered the market and its network expansion plans have also been almost as consistent. Aside from the odd year and when it entered South and Western Australia in 2016/17, it has opened 20-25 stores per year. Although growth has slowed, inevitably, as the network matures (it only opened 18 stores last year), we expect growth to remain ahead of the market for the foreseeable future. With estimated revenue of AU$11.0bn at the end of 2022 and over 560 stores, the retailer is expected to have over 600 stores by 2022 based on our forecasts. Aldi could still also enter new states in the market, although its focus will remain in the major conurbations. It will continue to grow its market share and with Aldi launching online grocery services in several markets, it would not be a huge surprise if we also see this happen in Australia.
Better understand Aldi Australia’s strategic priorities
To learn more about the retailers operations down under, its strategic priorities and what its latest stores look like – subscribers to Retail Analysis can access our report here