He went on to say that Tesco had suffered its worst three month sales period in 20 years as customers abandoned the supermarket at record speed, according to data.
In the Australian Financial Review on May 6, 2015, Sue Mitchell wrote regarding Woolworths Australia, “Group sales fell 2.1 per cent to $14.96 billion in the three months ended April 5, the first fall in quarterly sales for more than 20 years, as falling petrol prices and weaker revenues at Big W offset modest growth in food and liquor. Excluding petrol, Woolworths’ total sales rose just 2.3 per cent Easter adjusted to $13.77 billion”.
In a major mea culpa, Woolworths CEO, Grant O’Brien, said Australia’s largest retailer had taken its eye off the ball in recent years in its pursuit for growth and had lost the trust and loyalty of customers.
However, he said Woolworths would “not be beaten on price” and would reduce prices on thousands of grocery products to” neutralise” Coles, which has been outperforming its larger rival for 23 consecutive quarters, and “contain” Aldi, which in less than 15 years has taken 10 per cent of the $90 billion grocery market.
On May 20, 2015, Andrea Hogan from the AFN wrote that over the past few months Aldi has opened four new shops which move away from the low budget image.
The new Aldi store concept is focused on expansion of fresh produce, improved product displays, and new layouts which attempt to improve navigation.
Aldi is also aiming to cut average checkout waiting times at shops and is attempting to win over ‘ethical shoppers’ with environmental concerns being addressed for them in several new locations.
The new stores include features such as LED lights with the company being committed to reduce energy consumption. The changes follow customer feedback but Aldi is adamant that these will not affect the ability to offer low prices. Aldi’s trial centres are located in Kallangur, Queensland; Chisholm, ACT; McGraths Hill, NSW; and Highton, Victoria.
The similarity between the Tesco results in the UK and Woolworths in Australia is surprisingly close, albeit 11 months apart – worst three month results in 20 years and the loss of customer loyalty.
Due to force of circumstances I have been doing our household shopping since the beginning of the year. Aldi has cleverly opened many of its stores close to Woolworths stores.
I like Woolworths. It has a great range. I also like Aldi – its quality/price equation is great, and so what I do is visit Aldi and buy many basic items there, drop them in the car, and proceed to Woolies to get the rest.
What I have noticed is that I am not the only one using this strategy. Some of the customers that I see in Aldi, I see a short time later in Woolworths.
Aldi’s recent advertising campaign is clever. It offers reduced prices but only by a few cents. The subliminal message is, “Our prices are so low that we can only offer very little off”.
Meanwhile Aldi plans on opening 150 stores over the next few years in Western Australia and South Australia and 70 in the UK with a recruitment in the UK of almost 5000 people.
Tesco, Woolworths, and others were somewhat dismissive of Aldi when it first arrived. I guess that is history.