Woolworths, Aldi winning the supermarket wars: suppliers

afr.com:

Coles has narrowed the gap with Woolworths, but the dominant retailer is still performing better than its smaller rival, according to a major survey of consumer goods suppliers compiled by analysts at UBS.

The research found 41 per cent of the 37 supermarket suppliers surveyed said Woolworths had “a better last few months” – between April and June 30 – compared with 32 per cent for Coles. That is a major improvement on the same period last year, when 70 per cent of suppliers indicated that Woolworths had performed better than Coles.

But the investment bank’s retail analysts, Shaun Cousins and Jarrod Chisholm, found it was Aldi, the German discount supermarket chain, which had gained the most market share, according to suppliers, in the six months to June 30. Two-thirds of those surveyed said Aldi had “gained the most market share”, compared with 20 per cent for Woolworths. No supplier thought Metcash-owned IGA had increased its market share.

Suppliers say Aldi has had the most success in picking up market share in the last six months. Oscar Colman

Mr Cousins and Mr Chisholm, in a note to clients, said Aldi’s increasing market share was reflective of “the opportunity for [the retailer] in a higher cost-of-living environment” and because it had lost significant share during the COVID-19 pandemic. Most at risk from Aldi’s rise was Metcash, which had significantly increased its market share during the pandemic.

“Across Coles and Woolworths, Coles is more vulnerable to market share loss to Aldi given its focus on private label, and the superior store network, execution and online offer of Woolworths,” they said. Consumers are also increasingly buying groceries online, a channel less affluent shoppers use as a budgeting tool,