People who think Aldi will become a third force in the super markets business are delusional.
Firstly, they'll need to stock edible stuff to interest the mainstream consumer. I mean Sara Lee cakes instead of their "Ashwood" cakes, Kraft cheese instead of their aldi cheese, etc.
Unfortunately Aldi is not in a position to do this because they can't match the bargaining power Woolies and Coles has with the likes of Coca Cola, Nestle, etc, nor can they match the efficiency of the Woolies supply chain. That means they can never offer real food at competitive prices.
aldi will always be a niche business catering to the penny pinchers. the mainstream consumer will be perfectly happy paying 49c for a can of Coke or Pepsi rather than 38c for a can of Aldi Cola.
Oh, and by implication of the poor standing of supermarket wannabe operators, in my opinion the shares of Woolies represent a fantastic buy. They're like a licence to print money. Their profits get a leg up from GDP growth and population growth, assuming they don't open any new stores, and they're a natural hedge against inflation. Meanwhile competitors can't touch their businesses because new entrants don't have the scale to compete with them, and without competitiveness they can't get scale. I'm waiting for the shares to go down to about $15 before I back the truck up on them.
