Last week Australian legacy grocery retailers were once again reminded that Aldi was more than just a private label, low price competitor; they were informed that “Aldi becoming a ‘viral movement’, on track to reach $15 billion in sales by 2020 in Australia. In the United States Aldi will soon have 2000 units and discounter Lidl is scheduled to open its first store at the end of next year.
Ron Wood, director of retail consultancy PricingInsight, stated “shoppers could expect to see continued price pressure on “selected categories” as Coles and Woolworths battle to hold share… “Customers are going to be trailing and adopting Aldi products more regularly,”
Wood went on “There’s a viral movement where people are trying and being surprised by the quality. The marketing of price that Coles has so successfully executed will diminish as an effective lever to drive sales.” Now with over 1,800 units open in the United States and more on the way it’s clear that Aldi is quickly being adopted and driving customer migration in the US as well according to Foodservice Solutions® team.
Wood, pointed out something that is frighteningly familiar here in the US. Wood described claims by the (Australian) big two to be constantly driving down grocery prices as “smoke and mirrors”, with basket staples kept artificially low while high-value items increase. Here in the US Albertsons, Marsh, and Kroger
Foodservice Solutions® Grocerant Guru® agrees that in the US legacy grocery retailers are simply using “smoke and mirrors’ when it comes to pricing. Clearly “smoke and mirrors’ is not working when Aldi continues to be the fasting growing retail grocer in the US and growing.
It has been reported that deep grocery discounter Lidl is planning to invest over $ 3 Billion in the United States all while Aldi continues to invest. Foodservice Solutions® team thinks the only want legacy grocery retailers can maintain market share is to differentiate with grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food. I know you are not surprised at that.
It’s just true if they don’t change they will simply shrink while being stuck in the middle of a shrinking marketplace. Remember that In business there's no such thing as bottom of the 9th, 1 yard line or double overtime. And there's certainly no "Two Minute Warning." Are you Looking A Customer Ahead?
Invite Foodservice Solutions® to complete a grocerant program assessment, grocerant scorecard, brand, or product placement assistance. Since 1991 www.FoodserviceSolutions.us of Tacoma, WA has been the global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us or 253-759-7869