Aldi targets fresh food, new store managers in $90 billion grocery sector

ELI GREENBLAT
April 5, 2017
The Australian

Aldi is advertising for dozens of new executives as 2017 shapes up as one of the competitive periods in the nation’s $90 billion grocery sector in a decade.

Aldi is building up its middle management expertise by advertising for dozens of new executives, with the aggressive German discounter especially on the hunt for new store managers and regional managers, as experts predict 2017 is sizing up to be one of the competitive periods in the nation’s $90 billion grocery sector in a decade.

With Aldi also prepping to launch its new store format model nationwide, after a successful trial of the new shop design that gives a greater focus on fresh food featured across a handful of pilot stores, it is now hunting down new senior staff just at a time when new entrants such as US warehouse retailer Costco are also expanding.

And this could be one of the most important years for Aldi since it first arrived in Australia in 2001, as it prepares for its most ambitious store rollout program and refurbishment plan to date as Woolworths pumps billions of dollars into lowering prices and rival Coles also squeezes down on shelf prices to remain competitive.

“Aldi’s growing influence on the Australian grocery market shows no sign of let-up,’’ said Nick Miles, head of Asia-Pacific, for retail analysis firm IGD.

“The retailer has opened 36 stores to date in South and Western Australia in 2016, with IGD forecasting that by 2021 the retailer will have more than 590 stores across Australia.’’

The roll out, especially into South Australia and Western Australia, will give Aldi a greater economies of scale and give it the right to call itself a truly national retailer in the same league as Woolworths, Coles and the independents serviced by wholesaler Metcash.

“Until the start of 2016, Aldi’s presence in Australia was limited to the east coast, However, its long-awaited expansion into the new states of South and Western Australia is now well and truly underway. On top of this, Aldi has continued to expand its presence in the states on the east coast.” 

To help service this growth Aldi has splurged on advertising across leading jobs site Seek where it is looking for crucial middle management and senior team members such as store managers, regional managers, fresh food buyers and logistics staff.

Aldi has set out ambitious plans for itself in 2017 to up its fresh food and grocery offer which has long been seen as a weaker part of an otherwise strong retail offer.

“In 2017, Aldi in Australia will look to improve its fresh food offering, with a new centralised buying process, more in-store innovation and space for fresh food, plus a continuation of its Australia-first sourcing policy,’’ Mr Miles said.

However, it isn’t all going Aldi’s way. A recent survey by UBS analyst Ben Gilbert found Aldi was now struggling – after impressive growth – to snatch new shoppers from heavyweight rivals Woolworths and Coles.

“The magnitude of the slowdown in Aldi, evidenced by the broadbased fall in customer perception and drop in planned ­future visitation also surprised,” Mr Gilbert said.

“The rate at which new main shoppers increased halved in 2017, which suggests Aldi is finding it increasingly hard to gain new main shoppers from competitors.

“We believe winning a greater share of main shoppers will be key to Aldi seeing share gains re-accelerate, combined with the rollout of its new formats (greater fresh focus) down the east coast.”

Aldi’s sales jumped $1 billion to $5.8bn for calendar year 2014 as pre-tax earnings hit $238.5m. Six years ago, Aldi’s sales were only $3.14bn. The family-owned German discounter is tipped to raise its market share in Australia to 15 per cent within a few years, stripping as much as $4bn in annual sales from the pockets of Coles,