Aldi Australia to invest in stores as sales set to reach $7bn

Date : 02 November 2016

Aldi Australia shares optimism for another year of double-digit growth and announces plans to reinvest profits.

Sales expected to top $7bn this year

Aldi's Australia business achieved sales of $5.8bn in 2014 and $6.7bn in 2015. Now the discounter has revealed that it is on track to achieve another year of double-digit growth, with sales expected to surpass the $7bn mark in 2016. By the end of the year, Aldi will have opened 25 stores on the east coast, with an additional 32 stores in Southern and Western Australia where Aldi entered for the first time this year, taking the store total to c.450 stores.

Investing in stores: $1bn over three years

Aldi is also seeing profit growth, up 12% to $268m in 2015. Over the next three years Aldi will invest all profits in to its store estate, with plans outlined to refurbish and expand all stores on the east coast by 2020. Increased space dedicated to fresh will be a significant part of this process, with chief executive, Tom Daunt, telling The Australian Financial Review '...with the consumer increasingly shopping more frequently, buying a little less and becoming more interested in fresh categories, the biggest opportunity for Aldi in Australia is to improve our performance in fresh'.

New produce purchasing model

Along with changes to the estate, Aldi has a made a decision to alter its buying process for produce. Currently the category is bought state by state, however Aldi is now moving from eight separate functions to one centralised office which it says will result in better produce for its customers. Commenting on the move, Aldi has said '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'.

To become familiar with the new look Aldi Australia store format, click here.

To view our Australia Outlook for H2 2016 report, click here.

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