Aldi continues to challenge the dominant supermarkets to great effect, but the oncoming entry of competitor Lidl into Victoria means consumers should expect aggressive loyalty pushes, says research from Roy Morgan.
Roy Morgan warns that Aldi should be “vigilant”, pointing to the fact that Lidl’s arrival will undoubtedly see the crossover of some customers.
The low-cost German supermarket has been a long-time competitor of Aldi across Europe and is expected to open its first store in Melbourne at the end of the year.
“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. However, with its regular shoppers placing such importance on price and value, Aldi will need to be vigilant — once its old rival Lidl opens its doors in Australia - there will likely be some customer crossover,” said Roy Morgan CEO Michele Levine.
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 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 ground, and Woolworths flat-lining.
Aldi has expansion plans in the offing with new store openings planned for South and Western Australia. In an average four weeks, 35.1% of Australian grocery buyers shop at Aldi, despite it only operating across three states.
Levine believes that one of the ways Aldi will combat competition will be through loyalty offerings and pre-paid supermarket credit cards.
“Certainly, consumers stand to benefit from this increasingly competitive market, with wider choices and better prices as supermarkets work even harder to consolidate or grow their customer bases,” she added.
Email Nicola at nicolariches@yaffa.com.au.