Coles must analyse its competitors in order for Coles to be successful and efficient in the market, (Solomon, Marshall & Stuart, 2012). According to IBIS World research (2012), Woolworths Ltd and Westfarmer Ltd’s Coles are the “Supermarket Giants” of Australian industry, which account for about 40% and 32% of the market share respectively. There are also other Supermarkets which still own a significant amount of market share including ALDI and IGA, which both have various locations around Australia.
Figure 7: Market share graph (IBIS World, 2012).
Australia has a very recognized supermarket industry with Coles and Woolworths being the 2 dominant leaders in the industry. Both these supermarket giants, together account for more than 72% of the total market share in Australia. These two companies have the largest influence on the market and together could alter prices, however ACCC is responsible for making sure that smaller companies are treated fairly and the market is fair.
According to (IBIS World, 2012), economic of scale is a benefit for Woolworth and Coles, and subsequently knowing customer and marketing requirements, developing effective marketing positions and creating competitive marketing campaigns are important for them to uphold their competitive advantages in the competitive marketplace.
In 1924, Woolworths LTD was established however only in 1993 was it entered into the Stock Exchange. Woolworths is an Australian company which operates only in Australia and New Zealand. Woolworths is famous for its large variety of groceries and also its Liquor department. Woolworths has become one of the biggest companies in the Australian Stock market in terms of revenue, according to (IBIS World, 2012). In recent studies, it was found that 40% of all groceries bought, comes from Woolworths, (Keith, 2012). Woolworths is also the owner of some warehouse and hospitality companies around Australia.
All these departments increase the amount of profit that Woolworths Inc generated of a fiscal year. Woolworths ability to generate so much more profit that its competitors, gives Woolworths a great advantage of offering the best products and services to customers around Australia. (Woolworth Annual Report, 2012).
Woolworth’s sustainability strategy has been very successful and has achieved a far greater result than expected. Woolworth’s major effect was carbon emissions and therefore Woolworth’s first goal was to reduce the amount of carbon emissions. Woolworths also has great potential in reducing carbon emissions due to its enormous amounts of stored. Having about 872 stores, in various locations, modifying each one to become slightly to reduce the carbon emissions, can have a great impact on the total energy saved. Woolworths, being fresh food and grocery store, can also become more sustainable by changing the food wastage stream. Woolworths has now been disposing of food wastage to Earthpower, a more sustainable food wastage organization (Woolworth, 2013).
4.2ALDI Stores Supermarkets Pty Ltd
Supermarket Analysis Page 1
Last updated: May 2022
ALDI is a German supermarket company would was founded in 1913, however was able to begin its first 2 Australian stores in 2001. Since then, ALDI has increased its number of stores by an average of 25 stores a year. At the moment, ALDI now has 305 stores located in Australia (ALDI Australia, 2012). Though ALDI only has a small market share of about 5%, ALDI has still been able to survive quite easily and grow rapidly as it gains a large amount of support and funding from Germany. These investments have been paying off, as ALDI is generating large amounts of revenue, much faster than it is spending. ALDI’s expansion strategy has been extremely successful and has become a very popular supermarket for families on tight budgets.
ALDI has been so successful in the Australia Market primarily because of its ability to offer quality groceries at lower prices than its competitors Coles and Woolworths. ALDI is becoming a very recognizable supermarket in Australia and has millions of customers every year. (IBIS World, 2012).
ALDI has the opportunity and ability to offer lower prices because of its relationship with suppliers from other countries around the world, (ALDI Australia, 2012). This ability will make it difficult for Woolworths and Coles to compete with if ALDI keeps growing at the rate it is growing now. ALDI was also able to force the Supermarket Giants Woolworths and Coles to lower their prices to compete with ALDI. (About ALDI Australia, 2013).
Apart from its low prices and significant growth potential, ALDI also impresses its customers by donating products to large charity organizations such as Foodbank, OzHarvest and Secondbite. This has improve the ALDI image immensely.
Though ALDI gets some of its products from suppliers in German and other countries, ALDI has made it very clear that its fresh produce comes mainly from Australia. Figure 8
Figure 8: ALDI’s products. Source from: ALDI website.
ALDI (2013, June 26). ALDI Corporate Responsibility. Retrieved 28 Jun, 2013 from: http://www.aldi.com.au/au/html/company/corporate_responsibility_intro.htm?WT.z_src=main
ALDI (2013, June 26). About ALDI Australia. Retrieved 28 Jun, 2013 from: http://www.aldi.com.au/au/html/company/3775.htm?WT.z_src=main
Analysis of the Grocery Industry (2012). Coles Suppermarkets Australia. Deloitte Access Economics. Retrieved 26 Jun 2013 from: http://www.coles.com.au/Portals/0/content/pdf/Shareholders/Grocery%20Industry%20Report.pdf
ALDI. (2012). ALDI Australia. Australia: ALDI.
IBIS World (2012).Industry Insight. Retrieved 2012 from: http://www.ibisworld.com.au/newsletter/issues/au/12feb/news.aspx
Keith, S. (2012). Coles,…...
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