Aldi takes more market share from Metcash

Petrina Berry
(Australian Associated Press)

 

German discounter Aldi is taking a bigger share of the $100 billion Australian supermarket sector as IGA and Foodland fall further behind, new figures show.

Industry market researcher IBISWorld has analysed the supermarkets’ latest revenue figures and has found IGA and Foodland supplier Metcash has lost more ground as Aldi continues to successfully expand into WA and SA.

IBISWorld’s latest report on the supermarket industry, released on Wednesday, says Metcash has a 7.5 per cent market share, while Aldi now has 8.6 per cent.

A year ago Metcash had a 7.2 per cent share and Aldi was at 7.9 per cent.

IBISWorld senior industry analyst Nathan Cloutman says while Metcash’s portion of the market has increased, it will continue to fall further behind Aldi.

“The collective revenue from Metcash-supplied supermarkets has declined in 2016/17 and is expected to decline in 2017/18,” Mr Cloutman said.

“Aldi is rapidly expanding in the industry, in particular the company’s move into WA and SA in 2016 has helped the company boost its market share recently.”

Mr Coultman said Coles was also feeling the pressure from an expanding Aldi and a more buoyant Woolworths during the 2017 financial year.

Woolworths continues to lead with 36.8 per cent of the market, while Coles has a 30.9 per cent share.

The report said Metcash’s attempts to increase revenue through advertising and discounting, including matching the prices of Coles and Woolworths on a core basket of goods, have had “minimal success.”

“The chain’s profit margins have declined over the past five years, as price discounting strategies have lowered profit margins across many of its stores,” IBISWorld said.

Competition is likely to further intensify after the German supermarket chain Kaufland confirmed it will expand into Australia, and on expectations Amazon’s pending arrival will eventually include its online supermarket business.

Other players in the sector include Costco, which has an estimated two per cent market share, Foodworks chain owner Australian United Retailers which accounts for 1.8 per cent and SPAR Australia with 1.5 per cent.

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