ALDI is set to aggressively ramp up ad spends as it continues to take the fight to arch-rivals Coles and Woolies. And, at a time, when the other two have slashed their advertising budgets.
According to Nielsen AQX figures published in Fairfax Media today ALDI spent $34.7 million across all platforms in the 12 months to April 2016, an increase of $5.8 million from the previous year.
The German-owned grocer now accounts for 17 per cent of annual category spend in Australia. According to the Nielsen figures, Woolies spend was down in the same period from $88 million to $74 million, while Coles’s spend was down from $53.6 million to $48 million.
A report by ratings agency Moody’s from August last year found that ALDI’s aggressive ad spend would mean “the market share and profit margins of the two incumbents, but Woolworths in particular, to remain under pressure over the next 24 months.”
ALDI’s agency BMF declined B&T’s offer to comment on this story and comes just 10 weeks after embattled grocer Woolies switched agencies from Leo’s to M&C Saatchi.
ALDI’s increased spend is partly due to its recent expansion into South Australia and Western Australia. ALDI’s initial 10 year plan was to concentrate on the eastern states where it now has 340 stores. The next phase is SA and WA where it has plans to open a further 150 outlets.
Although often thought of having a catalogue model, Nielsen figures show ALDI’s preferred medium remains television with the discount supermarket chain outlaying $30 million in TV spend over the past 12 months.
The Nielsen AQX figures show that the entire category – the Australian Supermarket Group-owned IGA the other major player of the four – was worth $198.7 million in the year to April, with TV securing $116 million of that.