Aldi gains market share as supermarkets trim margins to stay competitive – report

The $101bn Australian supermarket industry is witnessing the rise of the German discounter as Aldi begins to eat up a larger market share.

Following a similar patter to that seen in the UK in recent years, established supermarkets are competing with low-cost retailers that are growing increasingly popular with consumers.

According to IBISWorld’s latest research, Aldi has grown its market share to 8.6%, with Metcash growing at a slower rate to 7.5%. Analysts predict that it will fall further behind Aldi in the coming months.

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Woolworths (36.8%) and Coles (30.9%) continue to enjoy the majority of the market, but the gap is narrowing and the arrival of Amazon into Australia may also shake up the industry. Another German discounter, Kaufland, is also setting up shop in the country.

IBIS noted a shift towards supermarkets trimming margins in a bid to compete on price with the discount retailers. Aldi’s private label good have proven extremely popular, a trend which has seen the likes of Woolworths and Coles increase their own selection of unique brands.

The market as a whole has grown by 2.8% since 2013 and currently employs more than 362,000 people across more than 1,800 businesses.