Aldi boss sees no threat from rival Kaufland

Mr Daunt also revealed that his chain recorded $9.2 billion in sales last year, giving it a 10.6 per cent market share of Australia’s grocery market.

Aldi’s market position and efficient model that allowed it to offer low prices meant it could defend itself against any newcomers.

“I don’t see any big adaptations for our business,” he said.

Aldi had sales of $9.2 billion last year, meaning it had a 10 per cent stake of the Australian grocery market. Credit:Peter Braig

Aldi on Thursday will release a report on how the discount trader has affected Australia as it steadily built up a network of 540 stores.

The report by PwC estimates that Aldi’s customers collectively saved about $2.2 billion a year by buying its private label products compared to shopping at Coles, Woolworths or IGAs.

And shoppers at other major supermarkets saved $450 million a year from price cuts prompted by competition from Aldi, PwC said.


Mr Daunt said one of Aldi’s most significant impacts was to spur Coles and Woolworths to improve their own home brand products, driving growth in cheaper private label from representing 4 per cent of all Australian grocery sales to just under 25 per cent.

Aldi opened 26 new stores in Australia in the past year, but Mr Daunt said its store growth would be slower in the future. Sales growth would come from evolving its product offering to match customer demand for more fresh food and healthier eating options, he said.

Aldi’s sharp business model has not always been well received in Australia.

Businessman Dick Smith last year said Aldi worked on the principle of “getting people sacked and importing from the absolute lowest price countries in the world”, and blamed it for the decline of his eponymous food brand.

Former Wesfarmers chief executive Richard Goyder questioned whether the company was paying its fair share of tax.

In its report, PwC estimates that Aldi contributed about $3.2 billion, directly and indirectly, to Australia’s gross domestic product last year, with $1.5 billion of that coming through the more than 1000 suppliers who produce Aldi’s products.

Meanwhile, the company released its tax payment figures, saying it recorded an income tax expense of $69.8 million from profits of $219 million in the 2017 financial year, which equates to an effective tax rate of 31.9 per cent.

Mr Daunt said there had been modest decreases across Aldi’s shelf prices over the past four years, but that had reversed slightly in the past six months with inflation running at 0.5 per cent due to the drought pushing up fresh food prices, and other rising input costs like power and labour.

The ability of suppliers to pass through cost increases has been a hot-button issue in the grocery manufacturing sector, with Coles and Woolworths fiercely resisting any price increases.

Aldi had partly passed on cost increases to customers while absorbing some into its profit margins, Mr Daunt said. Coles this week reported inflation of 0.9 per cent in the last quarter, driven by higher fresh food costs.

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