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Introduction Contd...
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According to the report, Aldi's presence had had a positive
impact in the neighborhood where it operated, "Aldi creates a strong competitive
dynamic on the products it stocks and puts pressure on Coles and Woolworths to
offer many of their private label products at prices not seen before Aldi's
entry."7
Aldi, one of the largest retailers in Germany, entered Australia in 2001.
Its
stated goal was "to provide our customers with the products they buy regularly
and ensure that those products are of the highest possible quality at guaranteed
low prices."8
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Aldi was among the oldest retailers in Germany, and was considered to be one of the pioneers of the hard discounter concept - a format characterized by a high turnover on a narrow range of grocery items in a small space (Refer to Exhibit I for features of a Hard Discounter).
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Aldi with its 'no-frills' style of retailing
maintained low prices through its low cost business model that
eliminated all unnecessary expenses and passed on the savings to the
customers. One of the biggest advantages of maintaining a simple
operational set-up was that Aldi was able to keep its wage bill low by
employing the minimum number of people. The company's motto was 'Top
quality at incredibly low prices - guaranteed'.
Aldi used the same business model along with a bit of localization in Australia and this helped it become popular with a section of the consumers and also to expand rapidly in Australia... |
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