Why ALDI doesn’t sell roast chooks
Despite Woolworths and Coles selling 90 million roast chickens a year, ALDI has refused to offer customers the same product.
Now, the ALDI Australia chief executive Tom Daunt has revealed the reason why the German retailer has stayed away from selling roast chooks.
In an interview with The Australian, Mr Daunt said the hassle of sorting out logistics, storage and the sale of roast chooks will spoil the secret ingredient of the ALDI business model: simplicity.
“Our philosophy is, let’s focus on what matters and do the right thing about the cost,” he told the publication.
“It is choosing what not to do, right? And we decide everyday things not to do because that keeps our business simpler and more efficient. And that efficiency … is what underpins a very low cost of doing business, which underpins our ability to serve great quality products at the lowest price.”
When Coles and Woolworths increased the price of roast chickens from $8 to $9, it was described by one retail analyst as an “industry-changing event” that could signal the end of the “race to the bottom”.
“From our estimates, at $8 no supermarket makes any profit from selling barbecue chickens and Woolworths sells around 50 million chickens annually and Coles sells just over 40 million,” Bank of America Merrill Lynch analyst David Errington said.
“A $1 price move is material but more importantly to us is a likely symbol that Coles and Woolworths are now looking at ways to improve profitability without compromising competitiveness.”
Last year, ALDI hit annual sales of $8 billion for the first time and holds about 12.1 per cent market share of Australia’s grocery sector, according to Roy Morgan.
Although the German retailer has grown significantly in the space of 17 years, expanding from two stores in Sydney to 500 nationally, the supermarket still faces criticism from some.
Earlier this year, Aussie entrepreneur Dick Smith slammed ALDI for being overly “secretive” and blamed the company for the closure of his Dick Smith Foods business.
He issued an open letter to owners Karl Albrecht Jr and Beate Heister, asking the duo to explain their “long-term plans” for ALDI Australia.
Mr Smith said the supermarket’s continued discounting would force local producers of out business.
However, those claims were rejected by ALDI, who revealed that the supermarket employs more than 11,500 Australians and partners with over 100 Australian suppliers.
Last month, Mr Daunt admitted that the mystery surrounding ALDI's operations had led to “inaccurate and misinformed information".
“We’ve definitely been guilty in the past of focusing on running the business, on taking care of customers, and we’ve invested no time or effort in informing interested parties in what on earth we’re doing,” he said.