Aldi Helps Keep Grocery Price Inflation Low in Australia

In a report Aldi commissioned the business advisory firm PricewaterhouseCoopers to compile, it appears that Aldi in Australia, with its low prices, has kept the grocery industry in that country competitive and kept grocery prices down across the board in Australia.

ABC reports that Aldi says customers in Australia have saved billions of dollars over the years whether they shop at Aldi or not. The report says Aldi customers in that country saved $2.2 billion a year, while customers who shop at other grocery stores saved $450 million, all due to price competition.

Daily Mail says Aldi is Australia’s third most popular grocery store, with an 11.4 percent market share, and that it has contributed $23 billion to the Australian economy. In contrast, Daily Mail says Woolworths has a 34 percent market share and Coles has a 27.6 percent market share according to Roy Morgan research.

Also, Daily Mail reports that Australia’s consumer price index grew by 1.3 percent in the year to the end of March, which is below the Reserve Bank of Australia’s goal of 2 to 3 percent.

ALDI Australia chief executive Tom Daunt said Aldi has contributed greatly to grocery price deflation in Australia.

“I’ve always known we’re doing good things. But to have that quantified, we’re actually quite proud of it and we were a little surprised at the size of it,” he told ABC.

Another factor keeping grocery costs down in Australia is the revitalization of Coles after it was taken over by Wesfarmers, and Coles competes against Woolworths. Aldi’s prices are around 13 percent below the other two major supermarkets.

ABC indicates that merchandise such as personal care items, cleaning products, and non-durable household products saw a lower rate of price increase in Australia during the past 10 to 15 years versus during the 1990s, while overall average inflation rates dropped only slightly.

Aldi, based in Germany, opened its first store in Australia in 2001.

Source: ABC and Daily Mail

About Rachael

Rachael is the Senior Editor for Aldi Reviewer. She is also a freelance writer and editor. You can find her at www.rachaelsjohnston.com.

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