Ratings agency Moody’s has released a report saying that big supermarket players, Woolworths, Coles and IGA, will continue to lose market share as ALDI expands into new markets.
This report deals another blow to the supermarket powerhouse after ALDI was named supermarket of the year at Roy Morgan Research Customer Satisfaction Awards and German supermarket company LIDL is rumoured to be making its debut in Australia.
“The big two, which together control over 60 per cent of the market, according to our estimates, are being challenged by the aggressive expansion of Aldi, whose market share on the populous east coast of Australia exceeds 11 per cent, as well as the potential entry of new market players,” Ian Chitterer, a Moody’s vice president and senior analyst said in the report.
“Focusing on a strategy of offering high quality private-label products to low-to-middle income consumers, Aldi — which first emerged in Australia in 2001 — has gained acceptance among consumers, and plans to expand rapidly in South and Western Australia where it is not currently operating.
“These factors will shake up the strong duopoly structure of Australia’s grocery market,” Moody’s said in a report on Thursday.
“As such, we expect the market share and profit margins of the two incumbents, but Woolworths in particular, to remain under pressure over the next 24 months.”
Aldi is set to open 60 new stores over the next 12 months, increasing its store footprint by 16 per cent.