Aldi unveils $700m assault on Western and South Australia
Mr Daunt said Aldi planned to invest between $400 million and $450 million in Western Australia and between $200 million and $300 million in South Australia over the next few years.
The capex, which will be funded from Aldi Australia's cash flows rather than a capital injection from its German parent, will take Aldi's total investment in Australia close to $4 billion.
Aldi has appointed South Australian construction firm BADGE to build a 35,000 to 40,000-square-metre distribution centre at Regency Park capable of supplying up to 50 stores and signed a contract with Western Australian construction company Georgiou Group to build a 45,000 to 50,000-square-metre distribution centre at Jandakot Airport capable of supplying as many as 100 stores.
The company said it was actively looking for suitable store sites, but had already committed to a number of WA locations. These include Cannington, Souther River, Halls Head, Kwinana, Rockingham, Australind, South Lake, Joondalup, Camillo, Midland, Mundaring and Ellenbrook. The first stores are expected to open in 2016.
After entering Australia in 2001, Aldi now has more than 10 per cent of the grocery market on the eastern seaboard, with more than 350 stores and annual sales around $5.3 billion.
Broker UBS estimates that Aldi could almost double sales in five years, challenging Coles' and Woolworths' stranglehold over the $85 billion market and increasing pressure on independent retailers supplied by Metcash.
UBS analyst Ben Gilbert fears the Australian market faces the same disruption as in Britain, where the growth of discounters Aldi and Lidl has crimped sales at major chains Tesco, Morrisons and Sainsbury and triggered a margin-crunching price war.
Source: smh.com.au
