Aldi Australia has reported a significant drop in profit and weaker sales growth for 2025, as shoppers appear to lose interest in the retailer's no-name brands amid an intensifying supermarket price war. The German discount chain, which previously benefited from consumers trading down during the cost-of-living crisis, saw sales growth slow to just under 5 percent, reaching $13.94 billion, compared to 10 percent growth in 2024.
Profit fell approximately 20 percent to $337.4 million, down from $417.03 million the previous year, attributed to soaring wages and higher inventory costs. Chief executive Anna McGrath expressed confidence in Aldi's value proposition, stating, 'We will not be beaten on the cost of the weekly shop,' and highlighted a $2.5 billion investment in new infrastructure to strengthen supply chains and expand the store network.
Aldi, which entered Australia in 2001 and now operates over 600 stores nationally, holds a 9 percent share of supermarket grocery sales. In contrast, Coles and Woolworths together control about 67 percent, according to the Australian Competition and Consumer Commission. Recent analysis by JPMorgan indicates a renewed price war, with Woolworths and Coles lowering prices to narrow the gap with Aldi.
The retailer's financial results come as Coles and Woolworths face increased regulatory scrutiny and multiple government inquiries into profiteering claims. Woolworths is currently defending a court case brought by the consumer watchdog, alleging it and Coles misled consumers with discount advertising. The Reserve Bank of Australia is expected to raise interest rates, which may further dampen consumer demand.
