Aldi wants new suppliers for $1 billion expansion push

German supermarket giant Aldi has launched a $1 billion expansion plan that will see it build at least 25 stores a year over the next three years – and it’s desperately looking for Australian grocery suppliers to support its push. “We are looking for suppliers that can meet our required volumes and importantly, are as passionate about high quality goods as we are,” group managing director Michael Kloeters says.

“We are growing by at least 25 new stores a year and are committed to building long-term relationships with our suppliers, many of whom have enjoyed growth
and success as we have expanded.”

Kloesters has even reinforced how well the supermarket chain treats its suppliers, trumpeting Aldi’s “uncomplicated business terms which include payment terms of 30 days net; and no rebates, discounts or listing allowances which cost suppliers money.”

Retail analyst Rob Lake says Aldi may be trying to win over those suppliers who feel they have been unfairly treated by the incumbent supermarket giants Coles and Woolworths, who are known for driving a hard bargain.

“There is a strong anti Coles and Woolworths feeling amongst some suppliers who feel they have been bullied and Aldi is appealing to that. Whether it’s valid or not is another thing.”

Lake also points out that Aldi has a reputation as being a difficult customer. “They are regarded as pretty tough to deal with, but some of that’s tough in good way in that they have high standards.”

Yesterday, Aldi officially opened its $35 million product development and quality assurance centre in Sydney. It also has plans to build two new distribution centres in New South Wales and Victoria at a total cost of $300 million.

Kloestets says Aldi would eventually like to grow its network from 205 stores to more than 750 in order to take on Coles and Woolworths, although finding appropriate sites has been a big challenge for the company since it arrived in Australia in 2001.

Lake questions whether Aldi is truly a challenger to the two majors and argues it will remain a key player in the discount space.

“The appeal of Aldi is more limited than the traditional supermarket. There are 750 product lines in an Aldi store, compared to 25,000 in a Coles or Woolworths store.”