April 1, 2013

Aldi to invest $2bn on 115 new outlets in Australia

Germany-based supermarket chain Aldi has outlined plans to invest nearly $2bn to expand its retail network in the Australian market.

By admin-demo

Germany-based supermarket chain Aldi has outlined plans to invest nearly $2bn to expand its retail network in the Australian market.

The funds will be used to open about 115 outlets across South Australia (SA) and Western Australia (WA).

Out of these proposed stores, WA is to house 70 outlets, while remaining 45 are planned in WA, The Australian reported.

Aldi is also set to launch 25 stores by the end of 2013.

Commenting on the expansion, Aldi Australia managing director Tom Daunt told the website that nearly $500m would be used to build two distribution centers in SA and WA.

In last 12 years the chain has extensively spread the business in the eastern region of the country that now boasts of 305 supermarkets.

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The parent company Aldi Sud has facilitated $1bn funds for this Australian expansion, with an additional $1bn to be made available later.

The move is part of the company’s strategy to leverage the growth in the country at a time when the retailer’s other European markets have been witnessing decline.

Aldi has witnessed 6.9% increase in average store sales of $1.4m per month, up from $1.31m in the previous year.

Commenting on the growth, Aldi spokesperson told the website that more people are discovering the great value that Aldi Australia customers have come to expect.

"The Aldi business across the United States, Europe as well as Australia is doing well given the current global economic environment," the spokesperson, however, added.

Aldi Sud operates a retail chain of 7000 supermarkets across Germany, Austria, Hungary, Switzerland, the US, Ireland, Britain and Australia.

The expansion comes at a time when its counterparts Coles and Woolworths are facing investigations by competition watchdog following allegations that they are misusing their market power to influence suppliers.

Australian Competition & Consumer Commission chairman Rod Sims told the website: "We’re going off the complaints we’ve got, and those complaints have a lot to do with the major players — we didn’t pick and choose who we took an interest in; it’s where the complaints led us."