Charlotte Foster
Money & Banking

Aldi boss reveals why their supermarkets are always cheaper

Aldi bosses have revealed why their supermarkets are always cheaper than Coles and Woolworths after being quizzed by the ACCC.

As part of the government crackdown on the supermarket duopoly in Australia, Aldi Australia national buying managing director Jordan Lack revealed the key reason why Aldi's prices are always lower. 

According to Lack, by keeping stores smaller, having fewer staff, and selling fewer items, prices are able to be kept lower than at other major supermarkets.

"All of those little things ensure that we can keep our costs down and pass that onto the consumer," Lack said.

Aldi says its supermarket shelves carry a range of only 1,800 items while Coles and Woolworths have more like 20,000 or 25,000.

For example, a shopper looking for raspberry jam at Coles would have seven brands to choose from, while a Woolies shopper would see eight different brands, as Aldi only offers one brand. 

The ACCC Inquiry was told that is a big part of how Aldi can be anywhere between 10 per cent and a third less expensive than Coles and Woolworths.

"We believe that incremental range adds costs and complexity through our supply chain," Lack said.

Retail expert Gary Mortimer agreed, saying "When you're dealing with less choice and fewer items you're dealing with fewer suppliers, fewer wholesalers and you get the economies of scale."

Image credits: Shutterstock

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money & banking, Aldi, cheaper, supermarket