Aldi are getting a lot of publicity at the moment because they are doing so well. They are known as a “deep discounter,” whereas Coles and Woolworths are known as “full service” supermarkets. Aldi of course makes its profits by hardly having any staff – that is Australian’s being employed.
Aldi also doesn’t have the costs of public listing – that’s where Coles, Woolworths and IGA are different. They are listed on the stock exchange so typical Australians, working families, farmers, or anyone can buy some shares, say through their pension or super fund and share the wealth. This costs Coles, Woolworths and IGA and additional amount of money, which obviously has to go in the price.
Aldi’s other big advantage is only stocking 20% of the range, in effect, they take away your freedom of choice. You basically have to buy what their buyer has decided is the best one to stock. That’s always going to be the product which will ensure the most amount of money is sent back to Germany or ends up in German hands, even if it is kept here.
The only way I can see Coles and Woolworths competing is to reduce their range by about 80%, sack lots and lots of their Australian workers and they may have a chance – but I doubt it.
I have said this before, as we get to the limits of growth, we go to a system that I call “extreme capitalism.” Aldi and Costco are good examples of this.
The greed must be unlimited, why would the private family in Germany that owns Aldi want to be taking on the world to make more and more money.