A Detailed Competitor Analysis of Aldi Australia's Retail Strategies

This report presents a competitor analysis of Aldi Australia, examining its position within the Australian retail market. The analysis identifies Aldi's direct and indirect competitors, including Woolworths, Coles, Kmart, Target, Metcash, Costco, and Amazon, highlighting their market shares and strategic approaches. The report details how data on competitors is collected and evaluates the current and future objectives, strategies, target markets, and marketing mixes of key competitors. It also explores Aldi's strengths and weaknesses, such as cost leadership and advertising effectiveness. The study emphasizes the need for Aldi to adapt strategies, including online shopping, to maintain and improve its market performance in the face of strong competition. The report concludes with insights into how Aldi can enhance its competitive edge.

Running head: ALDI AUSTRALIA
A Competitor Analysis for Aldi Australia
Name of the student:
Name of the university:
Author note:

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Executive summary:
Doing a competitor analysis helps to identify the areas of improvement and craft new strategies
to perform better. This study is also based on doing a competitor analysis for the chosen
organization Aldi. The study finds that Aldi has many direct and indirect competitors in
Australia in the form of Coles, Woolworths and others. Aldi needs to make new strategies to
keep performing well. Besides, Aldi should also focus on online shopping to attract more
customers and increase its sales figure.

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Table of Contents
Part A:..............................................................................................................................................3
Part B:..............................................................................................................................................5
1. Identify the competitors of the company.................................................................................5
2. How to collect such data..........................................................................................................6
3. Direct and indirect competitors...............................................................................................6
4. A competitor analysis grid....................................................................................................7
5. Assessment of competitors’ current and future objectives, strategies, target market,
marketing mix and competitors’ marketing organizations..........................................................8
Conclusion.....................................................................................................................................11
References......................................................................................................................................13

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Part A:
It is very important to conduct a competitor analysis regularly to know the current
performance of a firm in comparison to how others are performing. This project is also on
conducting a "Competitor Analysis" for Aldi Australia, which has captured significant attention
of industry experts, its competitors and of course its customers. Aldi in recent few years has been
successful in boosting its sales figures and so, its market shares. Aldi has seen its major
competitors such as Coles and Woolworths falling sales over the same time
(Finance.nine.com.au, 2019). However, a marketplace that is not either a monopoly or a duopoly
(once existed at the time when Australian supermarket sector was largely dominated by
Woolworths and Coles) is always full of competition to firms those are operative in the market
(Adom, Nyarko & Som, 2016).
Therefore, this “Project Plan” is to construct a report that gives adequate information on
the competition currently faced by Aldi in Australia. The plan will be served following a
structured format and using the relevant references.
The “Structure” will consist of a few points. These are:
 Identifying the competitors for Aldi;
 Data supporting the list of competitors for Aldi;
 Listing direct and indirect competitors for Aldi based on their level of competition to the
Company;
 Creating a competitors analysis grid that includes information such as company
information, customer information and so forth;
 Assessing competitor firms’ for their current and future objectives, marketing mix, etc.

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Few “References” to be followed are:
1. https://finance.nine.com.au/business-news/the-secret-to-aldi-australias-success/
2763615c-a03a-41cc-9cc9-c035d86f3f05
2. Adom, A., Nyarko, I., & Som, G. N. (2016). Competitor Analysis in Strategic
Management: Is it a Worthwhile Managerial Practice in Contemporary Times?. Journal
of Resources Development and Management, 24.
3. Yu, C. L., Wang, F., & Brouthers, K. D. (2015). Domestic and foreign competitor
identification and firm performance. European Journal of International
Management, 9(4), 463-483.
4. Seilov, G. A. (2015). Does the adoption of customer and competitor orientations make
small hospitality businesses more entrepreneurial? Evidence from
Kazakhstan. International Journal of Contemporary Hospitality Management, 27(1), 71-
86.

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Part B:
The section identifies the direct and indirect market competitors of Aldi Australia. This
means the list of competitors will also include online retail brands such as Amazon.
1. Identify the competitors of the company
There are many direct and indirect competitors of Aldi. However, to name a few the
below-listed names are Aldi's strongest competitors in Australia (Ceric et al., 2016):
1. Woolworths: holds 36.8% shares of the entire Australian supermarket sector
2. Coles: Another major name holding approximately 27.6% shares in the market.
3. Kmart: One of the major subsidiary brands of Wesfarmers Australia that continues to
make the difference by meeting the needs and demands of people in the lower-income
groups.
4. Target: Holds a good market reputation; however, currently under troubles from not
being able to differentiate its brand value from that of Kmart.
5. Metcash: It is a Public Company ranked one of the best out of top 2000 companies in
Australia. Their major resource of income comprises of grocery, Tobacco Product
Wholesaling and Liquor.
6. Costco: It currently has close to 11 stores in different parts of Australia. It sells many
products such as Groceries, Confectionery, Liquor, Tobacco, Toys, and others. The retail
outlets of Costco are currently available in a warehouse club format. Consumers willing
to shop from Costco will need to have the membership of the Company.
7. Amazon: It has just entered a few years back and is expected to get bigger with times.

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Please note, all the data supplied as above are as per the studies those published in 2016.
2. How to collect such data
The data supplied such as in the above section can be obtained from various official
websites such as the IBISWorld. Such data is also obtainable from Statista.com and articles
published on popular Australian daily newspapers and magazines.
3. Direct and indirect competitors
Below is the listing of Aldi’s direct and indirect competitors in Australia in a ranking
wise format. The ranking is based on the market shares for each Company (Mortimer et al.,
2016).
1. Woolworths
2. Coles
3. Metcash
4. Costco
5. Kmart
6. Target
7. Amazon

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1. A competitor analysis grid
(Yu, Wang & Brouthers, 2015)
Competitor Analysis Grid
ALDI
Woolworths Coles Metcash Costco Kmart Target Amazon Aldi
Company Information
Mission statement or purpose
to serve the
Australians fresh
groceries, foods and
other quality items
in the most
competitive price
bracket
delivering quality
service and value
to money
offering fresh
grocery and other
quality items at the
most valuable rate
offering
value to
money
serving
consumers
in the low-
income
group
offering
homeware
s,
clothing,
consumer
electronic
s and
other in
the mid-
price
range
selling a
wide range
of products
like baby
items,
clothing,
beauty
products,
homewares
and others
at a
competitive
price range
offering fresh
groceries and
other items at
the most
competitive
price bracket
Products and Services
groceries,
magazines, DVDs,
household products,
health & beauty
products, stationery
items, and pet and
baby supplies
groceries,
household
products, health &
beauty products,
stationery items,
and pet and baby
supplies and other
items
Groceries & general
products
mainly
seasonal
products
groceries,
household
products,
health &
beauty
products,
stationery
items, and
pet and
baby
supplies,
furniture,
garden
supplies,
automotiv
e
equipment
and other
items.
groceries,
household
products,
health &
beauty
products,
stationery
items, and
luxury
items
clothing,
baby items,
beauty
products,
books,
music,
homewares,
sports/fitnes
s goods,
stationery,
toys,
electronics
and video
games
Groceries,
food,
beverages and
household
essentials
Customer Service
Toll-free telephone number yes yes no no yes yes yes no
"Contact Us" page easily available yes yes yes yes yes yes yes yes
Customers and Marketing
Primary target market
matured customers
willing to buy fresh
groceries and food
items
customers willing
for fresh groceries
the customers
willing to buy fresh
groceries
people in
the lower-
income
group
people
falling in
the low-
income
group
the mid-
income
segment
of the
market
younger
people
living in
urban areas,
students,
employees,
professional
s, hard and
softcore
loyal, and
potential
users
lower and mid-
income groups
Secondary target market
customers willing to
buy homewares and
other items
customers looking
for stationery and
other items
customers willing to
buy convenience
items, liquor
products and
hardware items
mid-
income
groups
mid-
income
group
low-
income
group
retired,
mainstream
er,
struggler,
reformer,
aspirer and
others
richer
shoppers
Advertising effectiveness
one of the main
attractions in
advertising is
offering loyalty
schemes to
customers.
However, this can
be made even
better by increasing
discounts on
shopping.
quite effective
such as with
flybuys loyalty
program, running
sports for schools,
and a sub-slogan
"Down Down,
Prices Are Down"
the marketing push
by recently
appointed "The
Monkeys" is a good
move towards
creating awareness
on Metcash and the
value it creates
very
effective
with its
membersh
ip and
coupons
strategy
Kmart's
online
advertisin
g strategy
is even
better
than many
major
supermark
et brands
in
Australia
quite
effective
by going
live on
eBay
Amazon
effectively
manages its
keyword-
targeted
advertising
Aldi effectively
uses
bestadsontv.c
om to
advertise and
brand its
image in the
public
Sources of Competitive Advantage
(Seilov, 2015)
Cost leadership yes yes
Differentiation
yes but
struggled
due to
less
strategic
product
and brand
positionin
g strategy
Innovation
yes such as in an
advertisement
yes like in
the form
of
warehouse
format of
stores yes
Growth
Alliance yes yes

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5. Assessment of competitors’ current and future objectives, strategies, target market,
marketing mix and competitors’ marketing organizations
Woolworths:
The current objective is to stay ahead in the competition. The future objective is to
provide a convenient shopping experience for customers. For this, Woolworths will be
introducing new formats of stores while refurbishing others to make shopping a never like
experience (Anesbury et al., 2016).
New strategies are underway such as ready-to-go products will be added to its product
portfolio.
People in the middle to high-income groups will remain the target markets for
Woolworths.
Woolworths is constantly including new products in its product portfolio. For example,
the ready-to-take food, BWS store, in-store bakery, butcher and seafood, carbon-efficient
refrigeration and air-conditioning systems, and others. Pricing is suitable for middle to high-
income groups (Nagle & Müller, 2017). In promotion, Woolworths will remain focus on
strengthening its connectivity with people. Woolworths will introduce a new format of stores to
increase sales.
Coles:
The current objective is to provide fresh groceries and foods to customers with a better
network of stores. In the future, Coles intends to grow by appropriately utilizing the whole
amount of customers' data that they have access at its stores and its official online shopping site.

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In the course, it has also tied hands with Microsoft for effective utilization of such data by using
technologies such as automation, machine learning, artificial intelligence (AI) and data (Jamal &
Syahputra, 2016).
The future strategy of Coles is to collaborate with strategic entities such as Microsoft to
utilize customers' data more effectively and offer them even relevant products.
The target market for Coles is the customers of mature age groups who can and wish to
buy fresh groceries, foods and more items.
Various new products such as private label products will be introduced after being able to
read the data more accurately. They will move to everyday low pricing strategy. Brand and
product promotion will be done using social media sites more effectively (Arora & Sanni, 2019).
Coles will be coming with a few convenience stores in the future. Coles will be demerged from
Wesfarmers to become a Public listed Company.
Metcash:
The current objective is to offer quality items to target market segment. For future
Metcash is more focused on reducing the prices while growing the numbers for private label
products and general merchandise (Sebri & Zaccour, 2017).
The company has introduced a new business model to control its operational cost and
offer more competitive pricing for the products.
They will switch more to low-to-middle income groups for increasing the sales’ figure.
The numbers for private label products and general merchandise will grow. Pricing will
be made more competitive. Metcash will use artificial intelligence (AI) for promotional planning

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optimization. There will be plans to save more on operations in stores. For example, they will do
it by using more energy and carbon-efficient initiatives (Higgins et al., 2015).
Costco:
Currently, Costco is more focused on offering value to money. They have a plan to
introduce their e-commerce service as well.
E-commerce will soon become a part of Costco’s business in Australia.
In addition to low-to-middle income groups, Costco will also target people in the young age
groups with its future e-commerce site.
There will be changes in the product segment as Costco will be operating as an e-
commerce service provider in the nearing future. Online shoppers can expect a wide variety of
new products coming from their brand. Pricing will be made suitable for customers of different
kinds (Chen et al., 2015). Social media sites will be used for promoting this fresh move from
Costco. Stores will be made more operational while keeping the products’ prices low.
Kmart:
Kmart is currently aimed to satisfy its customers in low-income groups with quality
products at a hugely competitive pricing bracket. In the future, Kmart will be improving its
online shopping excellence.
Kmart will be benefitted from Wesfarmers buying of catch.com.au owned by Catch
Group. The buyout will help Kmart to improve its online shopping experience for its customers.
Kmart will also target millennials and people in other age-groups those who prefer to buy
from online retail brands.

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New products will be added to its product portfolio to operate more effectively with its e-
commerce site in the future. Kmart will still keep the prices low to keep it suitable to people
falling under the low-income bracket. Kmart will promote the launch of catch.com.au on
different social media sites (Sutton-Brady, Kamvounias & Taylor, 2015). The buyout of
catch.com.au by Wesfarmers will help Kmart to access the e-commerce site of the Catch Group.
Target:
Target offers groceries, homewares and other items at the mid-to-low price range. In the
future, Target will be strengthening its e-commerce services.
Target should change its product positioning strategy to make it more appropriate for its
target customer segment.
Target in the future could target more people in the younger age groups as it will be
benefitted from Wesfarmers buyout of catch.com.au, an e-commerce service of Catch Group.
Target will offer more products as it has plans to improve its e-commerce service. Target
will focus on making the price bracket more valuable for customers. It will use social media sites
to promote its e-commerce site (Dunlop, Freeman & Jones, 2016). Target will be at benefits from
catch.com.au buyout by Wesfarmers.
Conclusion
To conclude, it can be said that Aldi has both direct and indirect competitors in Australia.
Aldi currently is well received by Australians and is also able to create troubles for Woolworths
and Coles. However, to keep attaining the successes it needs to work on identifying new

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strategies and use innovative ideas to perform even better than it is doing now. Besides, Aldi
should also focus on online retailing to compete with Amazon and Coles.

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References
Anesbury, Z., Nenycz‐Thiel, M., Dawes, J., & Kennedy, R. (2016). How do shoppers behave
online? An observational study of online grocery shopping. Journal of Consumer
Behaviour, 15(3), 261-270.
Arora, A. S., & Sanni, S. A. (2019). Ten years of ‘social media marketing’research in the Journal
of Promotion Management: research synthesis, emerging themes, and new
directions. Journal of Promotion Management, 25(4), 476-499.
Ceric, A., D'Alessandro, S., Soutar, G., & Johnson, L. (2016). Using blueprinting and
benchmarking to identify marketing resources that help co-create customer
value. Journal of Business Research, 69(12), 5653-5661.
Chen, Y., Yan, X., Fan, W., & Gordon, M. (2015). The joint moderating role of trust propensity
and gender on consumers’ online shopping behavior. Computers in Human Behavior, 43,
272-283.
Dunlop, S., Freeman, B., & Jones, S. C. (2016). Marketing to youth in the digital age: The
promotion of unhealthy products and health promoting behaviours on social
media. Media and Communication, 4(3), 35-49.
Finance.nine.com.au. (2019). Aldi unpacked: The business model making a huge dent in
Australia's $100 billion grocery market. Retrieved 5 September 2019, from
https://finance.nine.com.au/business-news/the-secret-to-aldi-australias-success/
2763615c-a03a-41cc-9cc9-c035d86f3f05

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Higgins, C., Milne, M. J., & Van Gramberg, B. (2015). The uptake of sustainability reporting in
Australia. Journal of Business Ethics, 129(2), 445-468.
Jamal, A., & Syahputra, R. (2016). Heat Exchanger Control Based on Artificial Intelligence
Approach. International Journal of Applied Engineering Research (IJAER), 11(16),
9063-9069.
Mortimer, G., Fazal e Hasan, S., Andrews, L., & Martin, J. (2016). Online grocery shopping: the
impact of shopping frequency on perceived risk. The International Review of Retail,
Distribution and Consumer Research, 26(2), 202-223.
Nagle, T. T., & Müller, G. (2017). The strategy and tactics of pricing: A guide to growing more
profitably. Routledge.
Sebri, M., & Zaccour, G. (2017). Cross-country differences in private-label success: An
exploratory approach. Journal of Business Research, 80, 116-126.
Seilov, G. A. (2015). Does the adoption of customer and competitor orientations make small
hospitality businesses more entrepreneurial? Evidence from Kazakhstan. International
Journal of Contemporary Hospitality Management, 27(1), 71-86.
Sutton-Brady, C., Kamvounias, P., & Taylor, T. (2015). A model of supplier–retailer power
asymmetry in the Australian retail industry. Industrial marketing management, 51, 122-
130.
Yu, C. L., Wang, F., & Brouthers, K. D. (2015). Domestic and foreign competitor identification
and firm performance. European Journal of International Management, 9(4), 463-483.