IS WOOLWORTHS LOSING ITS EDGE TO ALDI?
Headquartered in Bella Vista, Australia, Woolworths Limited is the largest retail company in Australia and New Zealand, and the largest food retailer in both countries. The largest division is Woolworths Supermarkets (colloquially known as “Woolies”), a huge grocery store chain in Australia. Woolworths Supermarkets, and rival Coles, form a near duopoly of Australian supermarkets, together accounting for about 80 percent of the Australian market. However, the expansion of discount supermarket chain Aldi, headquartered in Essen, Germany is gaining market share in Australia. Woolworths currently operates 872 stores across Australia. Woolworth’s net profit for fiscal 2014 was $2.45 billion, and fiscal 2015 is to come in slightly lower than that number. However, Aldi has over 10,000 stores globally, including over 350 in Australia. Woolworth’s CEO, Grant O’Brien, announced his retirement in mid-2015, so a global search is underway to find a replacement.
1. Visit Woolworth’s company website (http://www.woolworths.com.au) and evaluate their commitment to the natural environment.
2. Visit Aldi’s website, www.aldi.com, and develop a competitive analysis for Woolworths as per what Aldi is doing and the extent to which Aldi is a threat in Australia. What can and should Woolworths do to combat the threat?