Aldi has ‘no current plan’ to come to Tasmania, CEO tells senate inquiry into supermarket pricing

Aldi has ‘no current plan’ to come to Tasmania, CEO tells senate inquiry into supermarket pricing
  • PublishedApril 12, 2024

For Tasmanians who want to see Aldi come to the island state, Thursday’s senate inquiry into supermarket prices included some bad news.

Since 2001, the German-owned supermarket chain, which promotes itself as having “Australia’s lowest prices”, has opened more than 590 stores in every jurisdiction except the Northern Territory and Tasmania.

Speaking at the supermarket inquiry in Canberra on Thursday, Aldi’s chief executive officer Anna McGrath revealed the company has “no current plan” to bring its business to Tasmania.

A member of the senate committee, independent senator Tammy Tyrrell told the inquiry “I am Tasmanian, we do not have Aldi … I need to put that out in the world”.

“[There are] petitions where people are begging you to come to Tasmania,” she said, before asking Ms McGrath if she believed the “duopoly” of Coles and Woolworths had “shut you out”.

Ms McGrath replied that was not the case.

“No, that’s not been the barrier to entry for us.”

A sign in an ALDI store saying "we support Aussie farmers".
Aldi’s chief executive cites “supply chain” considerations as the barrier for entry into Tasmania.(ABC Rural: David Claughton)

The other Tasmanian senator on the committee, Nick McKim, told Ms McGrath “there’s one question on the lips of many Tasmanians … why don’t we have Aldis in Tasmania?”

“The answer is, it’s just more complex,” Ms McGrath said.

“Tasmania, far north Queensland, with the distance and the complexities of the supply chain, it just makes it less easy. That’s not to say that we don’t continuously review where we may expand in the future.”

A woman speaking in front of microphones
Aldi Australia CEO Anna McGrath told the Senate committee there is “no current plan” to bring Aldi to Tasmania.(ABC News: Nick Haggarty)

Why Aldi in Geelong, but not Hobart?

“I live in Hobart, which is almost identical in population to Geelong. Could you talk us through exactly what the barriers to entry for Tasmania are?”

She replied it “goes back to us having a very different business model”.

“For us, the way that we’re able to continue to invest in price is to keep our operating costs as low as possible and having the lowest operating costs in the sector,” Ms McGrath said.

“That means when we’re identifying where to expand, we do need to consider the additional costs and complexities that are involved.”

Ms McGrath said the company’s business model was based on efficiencies.

“We offer such low prices by being a significantly less complex business than our competitors. Everything from our smaller stores, our limited product range and even the way we serve our customers means our business is simpler to operate,” she said.

“These efficiencies lead to reducing our operating costs. And this affords us the ability to maintain a low price position.

“We’re building new stores, we’re upgrading our distribution centres and investing into other areas of our supply chain to ensure we can provide our offers to an increasing number of Australians.”

In Tasmania there are 17 Coles and 32 Woolworths locations across the state, roughly equivalent to one store for every 8,957 Tasmanians.

Senator Tyrrell said without more supermarkets in competition with each other, Tasmanians would be “disadvantaged at the check out”.

“We know more competition leads to better prices for customers. If we can’t get other players in the game to Tassie, then it’s Tasmanians who miss out.”

SOURCE: ABCNEWS

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