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Aldi eyes expansion as competition heats up

Aldi groceryDiscount grocer Aldi is set to open and renovate its supermarket stores throughout the country in 2018.

It comes as Australia’s grocery sector competition heats up amid the entry of international competitor Schwartz Group into the market.

The German discount supermarket chain will open 32 stores in Australia this year and will refresh 40 more with its new store format, increasing its focus on fresh produce, healthy foods, organic and meat.

“We know that to meet the evolving tastes and preferences of our customers we need to continue to expand our range of fresh produce, and categories including healthy foods, organic and meat. Our national store refurbishment program has allowed for greater space to accommodate these categories, improve store standards and the in-store experience,” Aldi spokesperson said.

Aldi, which opened its 500th Australian store last year, has said it will open the new stores in New South Wales, Queensland, Victoria, Western Australia and South Australia. In NSW, seven stores are slated to open including two in the first half of the year in Wetherill Park and Warners Bay. Eight stores will open in Queensland, including two in the first-half of the year at The Gap and Dalby. Four Stores will open in Victoria, with one slated for the first-half in Gladstone Park.

Aldi’s 2017 focus on WA will continue, with 9 stores to launch out west including first half openings in Wanneroo, Beeliar and Byford. Four stores will open in South Australia, including one in the first half in Kilkenny.

The expansion is seen to put further pressure on established Australian supermarket giants Coles and Woolworths, including other local discounters such as The Reject Shop, which has struggled – particularly in Western Australia – with Aldi’s impact on the market in recent year. Tasmania will miss out as no word yet from Aldi on when or if they plan to open a store down south.

The recent news also comes amid the expansion of Schwartz Group owned hypermarket chain Kaufland into the Australian market, following its purchase of sites in Melbourne and South Australia last year.

Schwartz, one of the largest retail companies in the world, is considered to be one of Aldi’s toughest competitors globally, particularly through its other grocery brand Lidl, which is believed to be considering a move into Australia.

The growing prevalence of Aldi’s new format is also a new type of challenge to Coles and Woolworths given its focus on fresh-food, an area that the German business has not traditionally been known for in Australia.

Aldi intends to finalise the roll-out of its new store format to all its Australian stores by 2020, with more than 100 already trading under the repositioned offer. According to IBISWorld, the discount grocer had an 8.6 per cent share of the Australian grocery market by Q417, a presence it has developed continually since launching here in 2001.

This story was first published on Inside Retail.

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