Their whole model is based on minimal people costs, there is nothing wrong with that but.....they only have a certain number of checkouts and the design of their stores means that the number won't grow and even if they could there is not the people to man them.
Yes I have been in there on Sat & Wed when the special stuff comes out, it is not the value seekers I am talking about, they go where ever they see the value, it is the 'normal' shoppers. Will you stand in a long queue for milk or a loaf of bread that is priced roughly the same as WOW or Coles? Statistics say you won't, you will go for speed.
Shoppers base their destinations on 3 things;
1. Perception of Value
2. Perception of Convenience
3. Perception of Service
Each shopper rates these 3 things differently depending on what their needs are.
Of course ALDI's logistics costs will rise. Prior to their move west they only needed to supply east cost trunk. Now they will suffer the same costs as all the others, (as you state) because they need to land or haul stuff to Perth etc. They also have teh additional compliance costs in WA, i.e. can't sell whiteware in some areas on Sunday etc etc. This adds to their overall costs for a quite small population gain.
I agree with your comments about WOW and Costco, however Coles is just winning back customers it lost to WOW previously, (and maybe some more), their model is no different from WOW, just freshened up a bit.
WOW Price at posting:
$21.84 Sentiment: Hold Disclosure: Held
(20min delay)
