Aldi: The European Hard Discounter's Strategy in Australia

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"You can't go into an environment where successful people have been operating for 30, 40, 50 years and expect to do it successfully in a very short time. We are a different formula. We will be successful as well but that takes some time. Eventually we'll get our stores... because we are very long-term players."¹

- Michael Kloeters, Managing Director, Aldi Australia, in 2000.

"Our unique business model has helped us become one of Australia's fastest growing retailers, which is certainly an exciting place to be."²

- Stefan Kopp, Managing Director, Aldi New South Wales stores, in 2008.

Introduction

In August 2008, The Australian Competition and Consumer Commission3 (ACCC) released a report on the competitiveness of retail prices for standard groceries. About Germany-based hard discounter, Aldi Group (Aldi), which operated 172 stores in Australia, the report said: "Aldi has been a vigorous price competitor since its entry into Australia and has the incentive and ability to engage in sustained price competition. This has had a dynamic impact on the grocery sector and brought about competitive responses from Coles4 and Woolworths5 on many products."6

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1] "Aldi in Australia: What Will be the Impact?"www.coriolisresearch.com, May 2000.
2] "A Smarter Career with Aldi,"www.content.mycareer.com.au, 2008.
3] The Australian Competition and Consumer Commission (ACCC) is an independent statutory authority formed in 1995 to ensure that individuals and businesses comply with fair trading and consumer protection laws.
4] Coles Group Ltd (Coles) is one of the largest retailers in Australia with more than 2,900 stores throughout Australia and New Zealand. It includes brands like Coles, Kmart, Target, Officeworks, Liquorland, BI-LO, 1st Choice, Coles Express, Kmart Tyre and Auto, Harris Technology, Coles Online, Vintage Cellars and Pharmacy Direct. Coles Group was acquired by Wesfarmers in November 2007.
5] Woolworths Ltd (Ltd) is one of the largest retailers in Australia. Its businesses include supermarkets, consumer electronics stores, discount department stores, petroleum and liquor outlets, and hotels.
6] "Report of the ACCC Inquiry into the Competitiveness of Retail Prices for Standard Groceries,"Australian Competition and Consumer Commission, www.accc.gov.au, August 5, 2008.

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