German-owned discount retailer Aldi has committed over A$1bn to fund the expansion of its supermarket chain in Australia over the next three years, pushing into the market share of the two dominant local retail chains Coles and Woolworths.
The relative newcomer to the Australian retail scene also announced its profit had risen by 27 per cent for calendar 2009 to A$91.94m, reported the Sydney Morning Herald.
Those profits will be reinvested in Aldi’s operations in the country.
Aldi already has over 230 stores on Australia’s east coast, targeting Victoria and New South Wales in particular, challenging the market dominance of Coles and Woolworths.
The retailer has backed up its outlet expansion with a set of new back-end facilities. Aldi is spending A$35m on a product development and quality assurance centre and A$145m on a warehouse and distribution centre, both in Sydney, as well as A$140m on a warehouse and distribution centre in Melbourne.
On top of this spending, Aldi plans to spend A$1bn on new stores and distribution centres by 2013.
Since its 2001 debut, Aldi’s Australian operation has secured a 4-5 per cent share of the market; a respectable achievement, according to IBISWorld analyst Naren Sivasailam.
“Given they only entered the country in 2001, that is a relatively decent penetration against the duopolistic structure of the Australian supermarket industry,” he told the Herald.
“Young families are definitely the biggest demographic for Aldi and they `along with young people` represent roughly 36 per cent of all shoppers.”
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