Shoppers can save up to $80 each time they visit discount chain Aldi compared to supermarket giants Coles and Woolworths, according to an industry study.
The latest CHOICE supermarket price survey crowned Aldi the cheapest supermarket in Australia, saving customers who opt for home-brand products up to $8. Savings quickly rise to between $22 and $80 when compared to products of other brands at major supermarkets.
This was based on comparisons of the average cost of 33 popular products at Coles, Woolworths and Aldi.
This selection included trolley favourites Nutri-Grain, OMO laundry detergent, Tim Tams, Coca-Cola, Dairy Farmers milk, and five different fresh fruit and vegetables.
Coles was named the most expensive grocer of leading brands with selected products totalling $170.54, but only marginally ahead of Woolworths at $168.74.
Aldi consumers could pay almost half, with a similar basket of the German giant’s budget brands costing $91.76 and Aldi-branded products totalling $102.50.
The ‘Aldi effect’
Queensland University of Technology food retailing expert Dr Gary Mortimer told The New Daily that Aldi had significantly impacted the market in Australia, encouraging the major supermarkets to improve the quality of their home-brand products.
He dubbed this “the Aldi effect”.
“When supermarkets launched into private labelling 15 to 20 years ago, they were always seen as cheap and nasty, usually stocked at the bottom of the shelf,” he said.
“When Aldi came into the market, their home-brand products were not plain-packaged. Consumers started to trial them and liked the quality.
“Coles and Woolworths very quickly started lifting their game when it came to quality home-brand products.”
Dr Mortimer said that while consumers would save by shopping at Aldi – the discount chain has 95 per cent of its products privately labelled – shoppers could also substantially save by favouring home-brand products at Coles and Woolworths over leading brands.
“Consumers have warmed to home-brand products over the past five years,” he said.
“Across the sector, significant price discounting and promotions have created a more price-conscious consumer. We’re constantly looking for value when we shop.”
University of Sydney Business School Associate Professor Shumi Akhtar told The New Daily she believed the study had many limitations and did not capture, for example, the cost of petrol travelling to Aldi which may not be as accessible as the local Coles or Woolies.
CHOICE spokesman Tom Godfrey said shoppers in states without Aldi stores, such as Tasmania and the Northern Territory, appeared to be paying more for leading brands, whereas Aldi had contributed to pushing its competitors to lower leading brand prices in South Australia and Western Australia.
“Although the big supermarkets make a lot of very loud claims about value, it’s clear Aldi is Australia’s cheapest supermarket and it is forcing the big two to compete on price,” he said.
“There is no doubt that family budgets are under a great deal of pressure.”
Aldi lacking Australian ingredients
However, despite its cheaper prices, the study revealed Aldi is lagging behind Coles and Woolworths when it comes to stocking leading brand products with Australian ingredients.
It found that of the 28 food items in the basket, Coles and Woolworths had 22 and 21 home-brand products containing at least some Australian ingredients respectively, while Aldi had 17.
Dr Mortimer said he was surprised by the finding, being under the impression that Aldi stocked a high proportion of locally made products.
“While Australians do generally want to buy products with Australian ingredients and despite our best intentions, price does become a barrier and we tend to favour products which give us the best savings.”