Aldi triples supermarket share as Coles falters in last decade

By RJ Whitehead

- Last updated on GMT

Photo: iStock
Photo: iStock

Related tags: New south wales, Aldi, Coles

As Aldi continues to expand across Australia, new data show that its market share has almost tripled in the last decade.

The German supermarket chain has seen its portion of the market increase from 3.1% to 11.6% over the last 10 years, according to Roy Morgan Research. 

At the same time, Woolworths and Coles—Australia’s traditional retail heavyweights—have witnessed declines in their fortunes.

Just as it did a decade ago, Woolworths still holds the biggest slice of the market, but this has contracted from 40.3% in 2006 to 38.5% in March 2015. 

Coles’s share has decreased more markedly, from 37% to 31.8%. Aldi remains a distant third, but its push beyond the Eastern seaboard into South Australia and Western Australia suggests that its upward trajectory is not about to plateau.

Supermarkets
Market share over time: supermarket grocery market dollars

It has been particularly successful in Victoria and New South Wales, with just over 47% of each state’s grocery buyers visiting the chain each month.

In the last two years alone, Aldi’s share of the Victorian market has grown from 13.3% to 15.5%. Over the same time period, Coles’ slice of the pie has declined from 36.0% to 31.6%, while that of Woolworths has remained static at around 35%. 

It’s a similar story in NSW, with Aldi gaining ground (from 13.4% to 15.9%), Coles losing out, and Woolworths flat-lining.

Aldi shoppers are more likely than customers at other supermarkets to buy own-label products over well-known brands, and go out of their way in search of a bargain.

Aldi shoppers are also dramatically more likely than those who usually shop at Coles, Woolworths/Safeway or IGA to agree that good value and low prices are “very important”.

Conversely, people who prefer shopping at Coles, Woolworths/Safeway and IGA look more for a supermarket that is close to home over whether it has good value and low prices.

Michele Levine, chief executive of Roy Morgan Research, said an influx of budget chains should keep incumbents on their toes.

The planned entry of German discount supermarket chain Lidl into Australia, with its first store most likely to be in Melbourne, means all eyes will be on Victoria​,” she said.

While the threat of a new entrant with global buying power, expertise and experience will be a challenge, the main players in Australia are well placed with large existing customer bases​.”

Aldi will especially need to be vigilant, said Levine, as there will be some customer crossover once its old rival Lidl opens its doors in the market.

In any case, we expect to see Aussie supermarkets focusing more on customers than ever—understanding who they are, what their needs and drives are, and how to communicate with them and engage their loyalty​.” 

Supermarket credit cards and pre-paid mobile phone services such as ALDImobile are among the ways this is already being done, she said.

Related topics: Markets, Oceania, Supply chain

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