As the supermarkets face serious crackdowns over price gouging, German supermarket giant Aldi, which is notorious for being significantly cheaper than Coles and Woolworths has been grilled by the ACCC yesterday over just how it manages to keep its prices so low.
The answer, interestingly enough, is much simpler than many would imagine – the stores are smaller, employ have fewer staff, and they sell fewer items.
“All of those little things ensure that we can keep our costs down and pass that onto the consumer,” said Aldi Australia national buying managing director Jordan Lack.
Aldi said that its shelves carry a range of only 1800 items as opposed to Coles and Woolies’ estimated 20,000 to 25,000.
When looking at Raspberry Jam, for example, Woolworths has a range of around eight different brands, Aldi only has one. It is this lack of choice, Aldi said, that keeps costs and prices low.
“We believe that incremental range adds costs and complexity through our supply chain,” Lack said.
Over the next two weeks, the Aldo, Metcash, Coles and Woolworths bosses will be grilled over their pricing strategies. In February, a final report will be handed down to the Government on how Australians are being hit at the checkouts.
