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Aldi Australia is fast catching up to Woolworths and Coles, but Australians are still stressed out about the superfast checkouts.
A new consumer study has shown that incumbent duopoly Woolworths and Coles still rate highly – but German challenger Aldi could be level with them in just 10 years.
"While Woolworths and Coles dominate market share, Aldi has grown three times as fast over the last three, five, and ten-year intervals," the Dunnhumby Retailer Preference Index report said.
"The compound annual growth rate for Aldi in Australia dwarves its competitors. If Aldi continues to grow at this pace, they could double their market share in ten years."
Woolworths came first in the index, with Coles not far behind and Aldi coming in third but gaining ground.
Australia's 'emotional connection' to Aldi
Aldi beat Woolworths, Coles and IGA on shopper satisfaction on price.
Survey respondents were asked how much they would expect to spend at each store for a $100 of groceries.
The shoppers said they'd pay $69.18 at Aldi, compared to $85.32 at Woolworths, $84.39 at Coles and $87.58 at IGA.
Strangely the shoppers did not expect to pay $100 for $100 worth of groceries at any store.
"Customers who primarily shop at Aldi spend $61 less than at Woolworths or Coles. With the reality that Australian shoppers – like most shoppers around the globe – shop at multiple retailers each week and month, the price of a basket might matter more and more."
The report also said Aldi won on "emotional connection" – judged on measures like how likely shoppers would recommend the store to friends and family, and how sad the would be if a store closed.
"This is one of the most worrisome statistics for Woolworths and Coles. A strong emotional connection with its customers suggests it has stronger brand equity, and positions it well for continued success."
Aldi has room for improvement
The Dunnhumby report said that now that it has won on price, Aldi may start looking at other areas for improvement.
The check out experience scored a lot lower compared to its rivals, with its policy of scanning items at warp speed proving to be a big source of complaints in the past.
The range of ready-to-eat food also scored badly compared to Coles, Woolworths, IGA and 7-Eleven.
"There’s a lot of headroom for Aldi to improve convenience & quality perception – where it has scored low – and easy shopping experience," the report stated.
"Experience from the US has shown that they have used remodels to clean up stores, built more modern and updated-looking new stores in higher income areas, and improved perishable quality."
Aldi Australia also lacks a loyalty program, but it has stated in the past that this is a deliberate move.
Last summer the retailer even ran advertisements depicting its rivals' loyalty schemes as a strange cult giving out "pointless points".
"Aldi has a different point of view on loyalty. In the 17 years we’ve been operating in Australia, we’ve created a loyal following of customers by offering consistently low prices and great quality goods," said Aldi Australia marketing director Mark Richardson at the time.
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