Analysis: Aldi ups disruption in Australia with focus on middle classes

It might be only one store opening, but as regards the bigger picture, its significance should not be underestimated.

This fills in a major gap in Aldi’s Sydney network but, importantly, it marks the retailer’s first incursion into the wealthy Lower North Shore area of the city.

This hints at a new phase in Aldi’s Australian development. To date, it has focused on sites in less affluent suburban regions.

“This hints at a new phase in Aldi’s Australian development”

Howard Lake, Planet Retail

However, as its appeal has grown and its shopper perception has improved, it has steadily moved away from its hard discounter roots and increasingly has evidenced a more mainstream supermarket feel, with a concentration on its fresh offer and efforts to enhance the shopping experience.

We have observed this progression in several markets before, but Aldi’s success in disrupting the Australian market has seen it step up its supermarketisation strategy at a rate not yet seen in Europe.

Part of this is down to the market itself, one that has for too long been dominated by two giants in Woolworths and Coles.

Put simply, consumers were ready for a change and Aldi has been precisely what was required.

Strike while the iron is hot

The discounter is now eager to strike while the iron is hot.

Entering wealthier areas of larger Australian urban areas, as seen here, is one facet of its strategy.

If Aldi can steal middle-class spend from its rivals, it can achieve significant advances in the market. As competition on price intensifies, Aldi is perfectly placed to capitalise on any mis-steps by its beleaguered competitors.

• Howard Lake is senior editor at Planet Retail

This article was first published on Planet Retail