great good sense from coles md, page-5

Agree with you, to a point. My comments below:

ALDI is provably cheaper than the full-line supermarkets for the 700 or so SKUs that they stock, (See grocerychoice.com.au for facts.) BUT, no fresh goods, so it requires an extra trip.

Aldi DO have a limited range of fresh goods. They have >5% market share in NSW. These sales are coming at the expense of someone (who?). I wouldn't shop there all the time, but I reckon provided their locations are adequate (and site selection is aided by their small format stores) they will come to dominate sales for lower end consumers. Won't make a dent on the affluent but supermarket retail is mass market in Australia. There is no Whole Foods here.

COSTCO works well in North America, selling cheaper in bulk mass quantities. BUT most homes in North America (especially in Canada) have basements, where you can store mass quantities for the long haul (especially in winter, when basements approach refrigerator temperatures!). Australian homes mostly don't, and sheds are not as well-suited for storing some COSTCO goods.

Seen this before & it may have merit. I remember prior to Aldi's arrival the argument was insufficent number of SKU's, few brands and few fresh goods. Seems like Aldi doing well because the overall proposition works for some.

As you say at the end "not clear". One thing though - Aldi and Costco have impeccable retail pedigrees. My assumption is that they WILL succced but I could well be wrong!