Dick Smith has announced the closure of his food business amid pressure from Aldi’s successful supermarkets model, claiming it has “completely changed the face of retailing” in Austalia.
Australian businessman Dick Smith revealed on Thursday that his namesake food brand will be phased out after 19 years in business and $480 million in sales.
In a scathing open letter to German-owned Aldi, Mr Smith urges its owners to visit Australia to transparently explain its long-term expansion plans to parents and politicians.
He said he was concerned for the future of retail in Australia, as foreign-owned companies such as Aldi, Costco and Amazon close in on locally-owned businesses.
“In Australia your Aldi company has been phenomenally successful. It has not only taken billions of dollars of business from existing Australian-owned companies, but it has now been voted the most trusted brand in Australia,” Mr Smith wrote.
“You are privately owned, so it is not possible for Australians to share in the wealth creation of your company, and you also don’t have the costs of publicly listing on the stock exchange, which would result in the employment of many additional Australians.
“Your formula of employing less staff per dollar turnover compared to the typical Australian-owned supermarkets will ultimately mean less Australians employed.”
Mr Smith said Aldi’s model of offering a smaller range of products enabled it to employ fewer workers, resulting in lower prices and higher profits.
“From what I can understand, all the extraordinary wealth goes to both of you and your family members. You are not even known as philanthropists,” he wrote.
“I sincerely ask you to come to this country and explain what you are planning to do in the medium and long-term future that will affect our children and grandchildren.”
Dick Smith Foods thanked its customers and suppliers for their support.
Aldi responds to Dick Smith claims
Aldi, which employs 11,500 Australians and works with more than 1000 Australian suppliers, said it had an “Australian first” buying policy.
ALDI Australia chief Tom Daunt said the company had shared its growth with “hundreds of Australian manufacturers” and “thousands of staff”.
“We are proud to have influenced the entire grocery sector, which has led to price deflation benefiting all Australian shoppers,” Mr Daunt said.
“Our estimates suggest that we are saving Australians more than $1.5 billion per year. This is money that is returned to the economy for bills, holidays, education and other vital expenses.”