But with Coles and Woolworths firmly in damage control and making plenty of noise about lowering shelf prices on hundreds of products, Aldi is fighting to get to the top of your shopping list this Christmas.
Some reports suggest the two majors are bridging the price gap with Aldi, the consistent winner of Choice’s supermarket basket survey. Woolworths and Coles’ “price premium” to Aldi fell from about 10 per cent in January to 8.4 per cent and 8.2 per cent respectively in September, according to a JP Morgan report.
Lobster tails are part of Aldi’s new Christmas range.
At this time of year, Aldi is arguably not a natural first choice. Shopping for Christmas is about going all-in: people shopping to host a party or to throw a feast may look to Coles and Woolworths’ more comprehensive range of 20,000 to 25,000 products, compared to Aldi’s condensed list of 1800.
Christmas is also a time we like to put in our best. Lower interest rates suggest some breathing room in household budgets, so Australians may have greater appetite to trade up instead of down or to dine out this year than previous years, making the prospect of putting Aldi on the table look less appealing.
To keep prices as low as possible, Aldi has had to make calculated trade-offs: fewer complexities in the business means lower costs. Where Coles and Woolworths have thrown money behind their ecommerce engines as Australians show an increasing preference for grocery shopping online, Aldi has only partially plugged this gap through its recent partnership with DoorDash, which is all well and good when you’re short an ingredient or you have forgotten dessert, but it is not your first port of call for a full Christmas shop.
The broad embrace and the explosion of home-brand goods works both for and against Aldi, which in any case is leaning into what it’s good at: innovative, differentiated, high-quality products across the value and premium tiers for customers who don’t want to spend too much money or time in the kitchen.
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Trends have been important: viral flavours limoncello and Dubai chocolate have found their way into panettones this year. The air fryer has been transformational for the fridge and frozen aisle, where you’ll find most of Aldi’s new Christmas offerings.
As Coles and Woolworths fight to reclaim market share (the former is making more headway than the latter), Aldi cannot afford to cede ground on its foremost competitive edge: price. Aldi has lowered the cost of about 300 items this year, representing about a sixth of its range.
“There [are] definitely moves by our competitors. We are continuing to move as well,” Aldi chief commercial officer Jordan Lack told this masthead.
“We know customers come to us for price. We want to keep them for quality.”
With the down down, prices are down crew holding their Christmas bash next week, we know rivals are making preparations of their own.
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