Since entering Australia in 2000, Aldi has built a market share of 10.5 per cent by working with suppliers to create exclusive label brands that mimic the quality of a branded product but are offered at a lower price.

Loading

The German supermarket has chosen not to offer a loyalty program or online shopping to keep business costs as low as possible, even though the volume of grocery shopping completed online has soared since the pandemic.

“If you have employees picking the groceries instead of customers doing their own shopping, obviously, that is a cost that is incurred,” Lack said.

“When we looked at that proposition and understood the cost that it [online shopping] was going to bring to our business, we determined that that would have to be paid for by the consumer, and consequently that was not something that we thought was reasonable for us to explore ... to preserve our low-cost position.”

The supermarket chain, which has nearly 600 stores in Australia (excluding the Northern Territory and Tasmania) also said on Monday that it was focused on “sustainable growth” by maximising sales in existing stores rather than rolling out new ones.

“There’s less urgency in seeking to further expand the network,” Lack said. “We’re conscious that whatever we do, whether it be increases to our product range or increases to our store network, that they don’t have a cannibalistic nature on our network and therefore compromise costs.”

Aldi executives will face further questioning on Tuesday. IGA operator Metcash will front the inquiry on Thursday.

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.