A major battle has broken out between Coles and Aldi and it’s all down to products such as air fryers.
Last week Coles used media partner News Corporation to jack up a story about its limited-edition air fryer which went on sale at 88 stores.
The Company which spends millions in marketing dollars with News Corp is trying to copy Aldi’s highly successful Special Buys program that saw the Company offer an air fryer for $39 in May.
What’s not known is whether the Coles Air Fryer story was paid for by Coles because the story omitted to say that Coles only ordered a small amount of air fryers with some insiders claiming less than 2,000 units were put on sale.
The goods were sourced from Expansys who have the rights to the Thompson Appliance name.
Priced under a similar product from Aldi it’s also not known whether Coles used the product as a “lost” leader” that was used to generate publicity for Coles as they attempt to take on the German retailer who are known for their Special Weekly Deals which they introduced to Australia when the first launched their operation which has stripped customers away from Coles stores.
The Aldi product also had a rotisserie cooker built in Vs the Coles product.
In comparison when Aldi has a sell-out it can be for 10,000 TV’s selling at $799 with the TV’s swept up in a morning.
Recently Aldi shifted thousands of exercise equipment units with consumers queuing before the stores opened to get their hands on the exercise rowing machine.
A Coles executive told News Corp that they were “blown away” by the popularity of its air fryer oven, explaining that other items from the 30 deals on offer this week were still available at participating stores while stocks last.
ChannelNews understands that at Aldi it’s “business as normal” with the German retailer having a distinct margin advantage over Coles.
Several Aldi suppliers who were approached by Coles buyers to supply goods for their new program have refused instead they are staying with Aldi as the battle plays out.
According to sources the big problem for all retailers is the sourcing of products due to COVID-19 restrictions on flights.
“By now we would have been to several trade shows to see new products including the Canton and Hong Kong Fairs. Now deals are having to be negotiated on a video call and it’s getting harder for manufacturers to show off new products especially products that are ideal for Aldi Special buys” said one supplier.
Another major supplier to several big retailers including Kmart, Bunnings, Big W and Harvey Norman said that Aldi has deep pockets.
“Aldi have a major margin advantage over Coles, they have excellent relationships with both manufacturers and distributors, and they are not worried by what Coles is trying to do…they do need to respond”.