GERMAN supermarket juggernaut Aldi is continuing to grab a greater share of the Australian grocery market, exciting beef marketers who say the outfit is now providing much-needed strong competition.
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Famous for it’s queue-inspiring offerings of the weirdest one-off you-beaut deals, Aldi now holds 12.1 per cent of the total supermarket game, up from 11.6 in March 2015, according to the latest Roy Morgan data.
Woolworths holds 37.3 per cent and Coles 31.8, with IGA at 9.7.
This year, Aldi plans to open 16 new stores in South Australia and its first Western Australian stores. It has plans to launch 70 in WA over the “coming years”.
Processors supplying Aldi’s Highland Park beef brand appear to be actively seeking grassfed beef that grades Meat Standards Australia and are able and willing to talk forward contracts.
Northern NSW’s Bindaree Beef has been supplying Aldi for 15 years - since the chain first arrived in Australia - and now sends around 15 per cent of its beef that way.
Bindaree says Aldi is a valuable market for their operation and expects the chain to increase its share of the grocery market to as much as 20 per cent in the next seven years as it rolls out big plans to increase store numbers.
The increase in competition is much needed as Aldi provides an Australian outlet for beef away from the two majors, according to Bindaree.
This means when export customers ring, Australian processors have a base price to run the numbers against.
Experienced beef marketer David Farley said while Aldi’s beef supply chain was not as mature as that of Coles and Woolworths, which both acquire animals to the specifications of their own account and utilise service processing and packaging, it’s relationships with suppliers and service contractors were efficient and without conflict.
And Aldi was building its beef supply chain and brands.
“Competition is always good for primary producers but what must be remembered is that the retailer sells packaged red meat, not live animals, therefore the processor and wholesaler have a closer relationship with the retailer than the primary producer,” he said.
Aldi’s share of the total supermarket value, worth a massive $89.5 billion, is creeping up at the same time that Woolworth’s gradually declines.
Meat and Livestock Australia says supermarkets now account for 80pc of red meat sales in Australia.
Michele Levine, chief executive officer of Roy Morgan Research, said the German chain had a long way to go before it threatened Woolworths’ and Coles’ share of the market but Rome wasn’t built in a day.
“As with dollar market share, Woolworths and Coles have the largest customer bases by far, but with just one in five grocery buyers shopping exclusively at one supermarket, neither of these heavyweights should get too comfortable,” she said.