Australian consumers have unwittingly invited overseas discount supermarket giants Lidl and Netto to enter our market by showing their readiness to adopt private labels and jumping on the Aldi trolley.
QUT consumer expert Dr Gary Mortimer from the School of Advertising, Marketing and Public Relations said German supermarket chain Aldi had led the way.
"It is no wonder that Germany's Lidl and Denmark's Netto, both heavy hitters in Europe, are seriously eyeing Australia," Dr Mortimer said.
"When Aldi opened in Sydney in 2001, we underestimated the impact this business would have on the Australian grocery sector. We dismissed it as a small 'no-frills' food store with no known brands that shoppers had to help themselves to from pallets," Dr Mortimer said.
"But Aldi had identified an untapped segment of the market and filled it: price-conscious grocery shoppers who are happy to buy private labels.
"Aldi is now the eighth largest food retailer in the world and, 13 years later, has more than 300 Australian stores.
"It continues to grow at a staggering rate, is now our third largest food retailer and has recently announced plans to expand operations in South Australia and Western Australia."
Dr Mortimer said shoppers globally were abandoning traditional full-line supermarkets and moving to low-cost operators such as Lidl, Aldi and Netto.
"In Britain Aldi's market share has increased to 4.8 per cent up from 3.7 per cent, and Lidl has increased its share to 3.6 per cent. The UK's largest supermarket chain Tesco has dropped from 30.3 per cent to 28.9 per cent," he said.
"Shoppers' trust of the private label products that now dominate our supermarket shelves has been a leading cause of this shift.
"Supermarkets' 'good, better, best' private label strategy means shoppers can pick up the basics at bargain prices and splash out on other discretionary grocery items.
"If and when these overseas supermarkets do break into our market we won't be surprised if shoppers give them a go because research shows that 97 per cent of us shop across all supermarkets."
Media contact: Niki Widdowson, QUT media, 07 3138 2999 or n.widdowson@qut.edu.au
