Aldi and Woolworths to Amazon: BRING IT ON

Photo: Cameron Spencer/ Getty Images.

When news broke yesterday that US internet giant Amazon would “destroy” Australian retailers next year, armed with a fresh food catalogue, the gauntlet was laid down to the local supermarket chains.

Woolworths and Aldi have now responded, welcoming Amazon to Australia — and calling “game on” for the new grocery landscape.

“Australians are keen for an alternative place to shop and Aldi believes that greater competition in the grocery market is in the best interest of consumers. We accept competition as a healthy part of the retail landscape,” an Aldi Australia spokesperson told Business Insider.

Amazon, when it opens September 2017, will reportedly audit local supermarkets in order to undercut prices to the tune of 30%.

The Aldi spokesperson said it is already doing that against the major players Coles and Woolworths, and would not give up that differentiator without a fight.

“We have consistently led the market on pricing, with independent research finding shoppers can save up to 30% when comparing like for like single items and the full weekly family shop,” the spokesperson said.

“Aldi is and will always be the price leader in the market. This is our most fundamental competitive advantage and we will never ever give this away.”

Woolworths has responded to Amazon’s challenge by pushing the quality of its produce and local supply.

“We’re proud of our fresh food credentials, with 96% of all our fruit and vegetables sourced from Australia,” said a Woolworths spokesperson.

“Woolworths always welcomes competition. We are focused on putting our best foot forward every time, irrespective of what our competitors do.”

Business Insider has also contacted Coles for comment.

Online grocery shopping in Australia is a $3 billion industry, according to IBISWorld, having grown 15.8% annually since 2012. The overall Australian grocery sector is worth $105 billion in revenue every year. While Aldi does not compete online, Woolworths and Coles do.

The AFR yesterday reported Watermark Funds Investment chief investment officer Justin Braitling revealing Amazon’s plans to open distribution centres in every state next year to have both general and fresh items ready upon launch.

“They will also be putting physical stores on the ground which I don’t think anyone knows about,” the investment executive said. “These will mainly be in regional areas because fulfilment is a lot harder in regional areas than in the cities.”

An Amazon spokesperson told Business Insider today that the company “has a long-standing practice of not commenting on rumours and speculation”.

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