Saturday, June 22, 2024

ALDI doubles down on Price Promise

More Australians are filling their trolleys at ALDI and sharing $3.1 billion in annual savings, according to the retailer.

Grocery shopping data released by ALDI Australia shows that its Price Promise commitment remains strong, with $3.1 billion in savings delivered directly to customers in 2022, as analysed by PwC. And for those shoppers yet to make the switch, the downward pressure ALDI places on grocery prices in Australia saved non-ALDI shoppers $675 million in 2022 and a massive $7.8 billion since it opened its doors in the country over 20 years ago.

ALDI released the data along with a recommitment to its Price Promise – that ALDI will not be beaten on the cost of the weekly shop. “With the average family spending over $10,000 on groceries every year, and inflation on non-discretionary goods the highest it’s been in 30 years[1], this is a welcome commitment for Australian grocery shoppers.”

ALDI Australia Managing Director Jordan Lack says, “ALDI’s business model is about saving people money. We aim to cut out unnecessary costs and pass these savings onto customers. This has never been tested more than it was in the past year, and we’re proud that we’ve been able to maintain our price leadership at a time when Australians need it most, delivering ALDI customers $3.1 billion in savings last year alone.”

“We recognise the great responsibility we have to our shoppers and the broader community when they’re feeling the pinch from the rising cost of living. Our Price Promise remains the same from the day we opened our first store over 20 years ago – we won’t be beaten on the cost of your weekly shop. We know this commitment is more important today than ever,” Mr Lack said.

Price sensitive shoppers are increasingly making the switch to ALDI

ALDI’s prices are resonating with Australian shoppers, with data showing more customers are shopping at ALDI stores more often in the last quarter of 2022 (+4.2%, YoY) and delivering a gain in total market share in the same timeframe.

ALDI has also seen significant sales growth in the last quarter of 2022 (+13.2% YOY). These sales growth metrics have been driven by changing customer behaviour, of which:

  • Customers switching some or all of their spend to ALDI from other retailers, accounting for 73% of growth;
  • Existing ALDI shoppers increasing their spend at ALDI, accounting for 25% of growth; and
  • Customers who are new to ALDI and are shopping at ALDI for the first time, accounting for two per cent of growth.

These growth trends are expected to continue in 2023 as customers make value-driven choices about how they spend their hard-earned dollars.

“We have seen a shift in customer purchasing behaviour. Existing customers are shopping with us more frequently, and an increasing number of Australians are looking to ALDI for their grocery needs. We have seen increases in what we call the ‘centre of the plate’ – or proteins and vegetables – as Australians try to reduce pressure on their household budget without compromising on the quality of the family meal,” Mr Lack said.

ALDI’s Price Promise is built into its operating model and is why ALDI is “Good Different”. It’s built into how ALDI’s stores are run (including why customers need a trolley token and pack their own bags); it’s built into how ALDI curates its award-winning range that is streamlined seasonally to meet customer needs; and it’s at the heart of how ALDI works with its network of Aussie farmers, growers and supplier partners.

“We offer the best prices for customers by partnering with our suppliers for the long term and negotiating fair prices that deliver mutual value. We’re proud to work with a host of Aussie primary producers to connect our customers with the best value and highest quality products,” Mr Lack said.

Data references

Savings data compiled and analysed by PwC. The price gap between ALDI and competitors has been estimated using ALDI internal price data and ALDI provided price comparisons for major competitors. This has been translated into a price saving for ALDI customers using estimated household expenditures across categories drawing on Australian Bureau of Statistics (ABS) Household Expenditure survey and a range of supplementary ABS data sources.

ALDI business data credited to Circana Shopper Panel, QTR to 01/01/2023.

[1] Non-discretionary CPI inflation metrics.

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