Move over Aldi, more discount supermarkets could be on the way

 In Aldi, Australia, Metcash/IGA, NewZealand
Discount grocer Aldi may soon be facing competition from cut-price European rivals if trends in the $88 billion Australian grocery market mirror those in the UK.

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UK retailer Sainsbury’s controversial decision to back the relaunch of Danish discounter Netto has underscored the popularity of budget grocers Aldi and Lidl, which have almost doubled their share of the UK  market to more than 8 per cent in the last few years.

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Aldi has been even more successful in Australia, garnering 10 per cent of the eastern seaboard market in just over 10 years as consumers become increasingly frugal and seek to reduce the cost of their weekly grocery shop.

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In a report released this week, Commonwealth Bank analyst Andrew McLennan says there is room in Australia for a second discount grocery chain.

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Mr McLennan sees scope for Netto, Lidl or other discount operators to open stores in Australia, either under their own steam or in partnership with incumbents such as Woolworths, Coles or Metcash. Sydney Morning Herald – Read more…

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