Aldi Heating Up Grocery Game with Coles and Woolworths

Last year German grocery chain Aldi, rolled out its new store format in Australia, one that saw its fresh food floor space increase from 15% to 25%. Analysts at Morgan Stanley say the move has been a “game changer” for the company, according to a note to clients largely based on discussions between analyst Thomas Kierath and former senior Aldi executive, Paul Foley.

Kierath says that Aldi is also increasing the price gap against Coles and Woolworths – the company’s merchandise is on average 18% cheaper at present, compared to 14% two years ago. This price comparison is based on around 350 frequently purchased items.

Last week Woolworths announced it will rev things up in the fresh food category by resurrecting its Fresh Market Update, providing informative seasonal news on fruits and vegetables in Australia.

Fresh Market Update sees two experienced Woolworths team members embarking on a road trip across Australia to meet several growers on their farms. The campaign will be supported by multi channels including TV, digital, social media radio, in-store and catalogue.

Coles and Woolworths currently have a strong online store presence in Australia, with Coles ramping up its home delivery offerings this year, rolling out delivery trials with bicycle delivery service Deliveroo in January this year, and most recently with tech giant Uber.

While Aldi does not presently have an online store in Australia, shoppers can now get goods delivered to their home via smartphone, through German Android app, ShopWings, with a grocery butler delivering goods within an hour.

Although the service is only available to Sydney and Melbourne consumers, Aldi will look to roll out similar capabilities in other cities, following its recent successful partnership with home delivery service provider Instacart in the US.

“Grocery shopping online is a relatively small part of the business but it is continuing to grow,” Aldi’s vice president of corporate buying, Scott Patton told Reuters.

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