Aldi’s fast growth poses threat to Woolworths and Coles, Moody’s says

 In Aldi, Australia, NewZealand
Aldi’s growing presence is a long-term threat to Woolworths and Coles and could lead to lower profit margins as the big chains try to defend market share, ratings agency Moody’s says.
While Aldi’s expansion so far had come largely at the expense of independent retailers supplied by Metcash, the discounter’s increasing acceptance by Australian consumers and its "aggressive" growth plans would ultimately challenge the duopoly structure in the $88 billion grocery market, Moody’s said.
"In such an environment and based on international experience with the growth of discounters, we expect the market shares and margins of Woolworths and Coles to come under pressure over time," Moody’s vice-president and senior analyst Ian Chitterer said.
Pointing to the impact of Aldi and fellow discounter Lidl in Britain, Mr Chitterer said margins at Woolworths and Coles were likely to rebase as they cut prices and invested in stores to protect their dominant  market share.  Sydney Morning Herald – Read more…

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