Grocery giant Aldi eyes NZ market

Saturday, 9 January 2010

German supermarket giant Aldi is rumoured to be eyeing the New Zealand market and investigating sites as it looks to expand from Australia.

The move would give Kiwi shoppers a third choice for their weekly groceries and break the duopoly held by Progressive and Foodstuffs.

Aldi has registered more than 100 trademarks with the Intellectual Property Office of New Zealand and has the New Zealand website domain name Aldi.co.nz.

A spokeswoman for the company would only say Aldi was focused on its operations on the east coast of Australia at present, but the Waikato Times understands Aldi has been eyeing the New Zealand market and has had people in the country looking at sites.

The supermarket operates a warehouse-style approach, using pallets of product parked in aisles. The chain stocks a limited number of product lines, between 1000 and 2000, compared to up to 25,000 which some supermarkets stock.

Foodstuffs managing director Tony Carter said it had been rumoured for some time that Aldi was planning to enter the New Zealand market and Foodstuffs welcomed any competition.

He said Foodstuffs was progressing with its work on the new Pak 'n Save in Te Awamutu, and looking to further its offerings in the Waikato.

Foodstuffs, which has the New World and Pak 'n Save brands, and Progressive, which has the Countdown brand, came under fire late last year after figures showed New Zealanders had suffered a 42.5 per cent increase in food prices since 2000.

Labour consumer spokeswoman Carol Beaumont has called on the Government to encourage more competition in the market.

The study showed New Zealand grocery prices have risen 42.5 per cent between 2000 and 2009, followed by Australia, which was paying 41.3 per cent more. Britain's prices rose 32.9 per cent and America's were up 28.4 per cent.

The Australian study said food prices in New Zealand were growing faster than in any OECD country.

Pak 'n Save Mill St owner Glenn Miller said he had heard Aldi was looking at New Zealand, and he had travelled to Australia to look at its operations there.

'Yes, it would be good if they came to New Zealand.

'It would provide some more competition.'

He said New Zealand was a different market to Australia however, because Australia did not already have the low price structure New Zealand did with the likes of Pak 'n Save.

He said there was a large gap between premium offerings and cut price operators in Australia, and as a result the savings which could be made there were more evident.

'There wouldn't be as big of a gap here, so the savings wouldn't seem as great.'

He said Aldi ran a very small product range, and did not offer shoppers a deli or fish section.

'For people that are looking for one-stop shopping, it's not really the same.'

Foodstuffs general manager of supermarket operations Dave Chambers said he was aware Aldi had been looking at New Zealand for some time.

'We will strongly compete with whoever is in the market.'

Aldi opened its first Australian store in 2001, and now has 200.

The company has 8078 individual stores worldwide, and it is estimated a new store opens every week in Britain alone.