Choose good and fast and we will postpone every other job, cancel all appointments and stay up 25-hours a day just to get your job done. Choose good and cheap and we will do a great job for a discounted price, but be patient until we have a free moment from paying clients. In a follow-up to Russell’s popular blog post on the threat of Aldi to Woolworths and Coles, we are starting to see competitive responses from the incumbents – and whether they’re working. As a brief background, Aldi is a discount supermarket that sells a relatively small number of branded goods at very cheap prices.
Woolworths, traditionally recognised as the “Fresh Food People”, has responded to this threat by attempting to change the consumer’s perception of their brand. On the surface, it sounds like a reasonable strategy – if consumers are conditioned into believing that Woolworths has cheaper prices, then they will refrain from visiting the discount supermarkets. Tesco is one of the major UK supermarkets that succumbed to the margin pressure of Aldi and Lidl.
At Woolworth’s latest half-year results, management acknowledged that the campaign had not improved price perception sufficiently, and the focus had now shifted from being “competitive” on prices to being consistently cheaper. This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. I’ve left comments on this website for 2 or 3 years about how Woolies are not well managed and have an old model. If you use a trolley at Aldi, you must put $1 or $2 in, if you don’t return the trolley, a homeless guy (or ice addict) will and collect the money.
Yes, they have promos but a much smaller number of sku’s and much much smaller number of promos.
Thought of another point i thought i would share which relates to my own investment philosophy and process. The case study above shows why i have seperated out brand and competitive advantage where as some might believe they are linked.


Woolworths advantage is not in prices, but convenience, shopping experience and access to the branded products that customers will still want regardless of how much the generic aldi product is.
Overall, looking at the overall umbrella of businesses as a whole that makes up Woolworths. It is still a good business, but they appear to have caught what i believe is some form of virus in Australian retailers management that makes them do some questionable things and misread the intelligence of the market.
I used to think WOW was bullet proof, that perception hS sure changed and combined with their problems in other areas I have really rethought my view of their quality.
Reports will be hosted as exclusive members content on our site.By registering you understand & agree that we may send a monthly email notifying you of each report. A law blog addressing the foci of 3 intrepid law geeks, specializing in their respective fields of knowledge management, internet marketing and library sciences, melding together to form the Dynamic Trio. You truly get what you pay for, and in our opinion this is the least favorable choice of the three. This business model is effectively the opposite of that employed by the traditional supermarket, and needless to say it has had a meaningful impact on the margins of major supermarket companies in Germany, France and the United Kingdom. Tesco’s initial strategy to combat the rising discounter threat was very similar to the one employed by Woolworths. Woolworths has allocated $500 million to this strategy, and management has described it as the start of a broader investment strategy to provide market leading prices to customers. 354564) and may contain general financial advice that is prepared without taking into account your personal objectives, financial circumstances or needs.
The headoffice expenses is much much smaller for promos, statewide pricing at Aldi also makes admin less expensive.
Aldi are putting funny ads on TV and Coles and Woolies have no personality, and it’s something they are stuck with. Aldi entered Australia in 2001, and its scale is now sufficient to start disrupting the competitive landscape.


In 2011, Tesco allocated ?500 million pounds to reduce the prices of 3,000 products in a campaign called the “Big Price Drop”. If the changes in the UK market are any indication of what could occur in Australia, then this investment is not going to be “Cheap, Cheap”. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking advice from a financial advisor if necessary. Aldi put a line in the sand and said pay for bags and coin operated trolleys and no baskets (they used to have them).
The only thing is people who leave comments never interact with each other to learn more off each other. They simply wanted to make sure the market thought they were cheaper than Coles and created an environment for an already growing and successful Aldi brand to grow at an even faster pace. This is a regular site and leads me to wonder if this is the result of a general strategy or if my local one is just poorly managed. The price reductions didn’t go far enough, and the incumbents quickly learnt that consumers will vote with their feet if the amount at the bottom of their receipt does not meaningfully fall. It also took the focus off their other brands which is why Big W, Masters etc have been showing some poor performance. Empty shelves seems like breaking the cardinal rule of retail as customers can’t buy what is not stocked.
Aldi have none of that, they negotiate a price and it stays like that and it is also statewide, Coles and Woolies are regional and area based so more complexity.



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