Aldi prepares for assault
</B>German supermarket chain Aldi has made its debut in the Australian market. Maria Ligerakis looks at what consumers can expect from the discount retailer.
SPECULATION and rumour have surrounded German supermarket chain Aldi's pre-launch phase into the Australian market.
Aldi-which offers around 700 product lines, compared with 20,000 in supermarkets-has kept everything from details of its launch date to its marketing strategy hush hush.
And in sticking to its global policy of not talking to the media, Aldi has generated much publicity and press hype, with consumers not quite sure what to expect from the discount retailing giant.
But with the opening of its store in Bankstown this week, the veil of secrecy has been removed.
Aldi will model its marketing strategy on activity overseas, stocking a limited assortment of private label goods, implementing cost cutting techniques and attempting to lure shoppers with discount staples.
According to written information released by Aldi, the discount retailer is confident it has a winning formula, adaptable to any market.
"We sell at the lowest possible price. Our unique way of operating makes it virtually impossible for competitors to match our combination of price and quality," an Aldi statement says.
Aldi's cost cutting culture is evident across the board, with the absence of in-store shelving, only a few staff and products stacked in large cardboard boxes.
"Aldi eliminates some of the 'extras' found at other grocery stores, for example baggers, fancy displays and preferred customer savings programs," the statement says.
"Aldi does not hide the cost of grocery bags in our retails. Instead, we encourage you to recycle your grocery bags or we make them available for purchase."
In addition, Aldi's price signage and checkout system (where shoppers bag their own groceries) is also designed to reduce overheads.
While Aldi appears to have its strategy worked out to a tee, how will Australian consumers react and what lies ahead for dominant players in the grocery industry?
Retail World publisher Barry Flanagan predicts Aldi's debut in the Australian market will forever change the grocery landscape.
"With its deep discount offer through a range of 600 private label SKUs, Aldi wants to grab that bottom position that had been the hallmark of Franklins for generations," Flanagan said.
"And while the big three of the Australian grocery industry initially downplayed the potential threat from the German giant, they are soon realising that the shape of the Australian market will be changed forever."
With Aldi keeping details of its Australian assault a closely guarded secret, only time will tell whether price alone is enough to attract consumers and how the likes of Coles Myer and Woolworths will respond.
