{"id":925293,"date":"2026-10-12T10:20:34","date_gmt":"2026-10-12T10:20:34","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/925293\/"},"modified":"2026-10-12T10:20:34","modified_gmt":"2026-10-12T10:20:34","slug":"costco-aldi-and-ikea-see-profit-surge-amid-cost-of-living-increase-leaving-coles-woolworths-in-the-dust","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/925293\/","title":{"rendered":"Costco, Aldi and Ikea see profit surge amid cost of living increase, leaving Coles, Woolworths in the dust"},"content":{"rendered":"

Aussie shoppers are increasingly turning to foreign-owned budget grocery retailers Costco<\/a> and Aldi<\/a> as cost of living<\/a> pressures continue. New ATO data shows the two chains recorded record profits in Australia in 2025, earning a combined $20 billion, 9News reports.<\/p>\n

This surge in sales at Costco and Aldi comes at the expense of local giants Coles and Woolworths, which each reported growing challenges in the supermarket space as consumers increasingly shop at alternative food retailers to stretch their budgets<\/a> further.<\/p>\n

\"coles<\/p>\n

The surge in sales at Costco and Aldi comes at the expense of Aussie supermarket giants Coles and Woolworths.\u00a0Getty Images<\/p>\n

Ikea is also gaining ground on competitors, with the budget furniture brand proving to be a favourite with buyers nationwide, although Kmart\u2019s recent foray into affordable homewares and furnishings via its K home outlets will keep Ikea on its toes. In addition to this, there are reports Costco plans to expand its homewares and furniture offerings.<\/p>\n

But it is in the grocery space where Costco, and Aldi, appear to be gaining the most traction.<\/p>\n

\"<\/p>\n

Aussies are increasingly turning to the two foreign-owned budget grocery retailers.\u00a0Jo Abi<\/p>\n

Retail expert Gary Mortimer from Queensland University of Technology predicts this trend will keep growing as families tighten their belts even further at the supermarket checkout. <\/p>\n

\u201cI think it just goes to show consumers are becoming incredibly savvy when it comes to saving during a cost-of-living crisis,\u201d Mortimer told nine.com.au. <\/p>\n

\u201cOne of the things Aussie families face every week is food and groceries. It\u2019s just a product category you cannot avoid.\u201d<\/p>\n

Consumers increasingly seek budget brands <\/p>\n

The switch to Costco and Aldi comes alongside rapid growth in sales of affordable supermarket home\/private brands, with the two stores leading the way in this category.<\/p>\n

\u201cIf we go back 20 years, people didn\u2019t buy generic products, and people didn\u2019t shop at Aldi. It was seen as cheap,\u201d Mortimer said. <\/p>\n

\"<\/p>\n

The switch to Costco and Aldi comes alongside rapid growth in sales of affordable supermarket home\/private brands.\u00a0Jo Abi<\/p>\n

\u201cToday, people are really looking at private label products. They\u2019re looking at alternative ways that they can save on their food and groceries. <\/p>\n

\u201cSo, they\u2019ll go to discounters like Aldi, or they\u2019re shopping in bulk at Costco to save on that unit price.\u201d<\/p>\n

While Coles and Woolworths are often referred to as a \u201cduopoly\u201d in the Australian grocery market, Mortimer says current trends show this \u201cnarrative\u201d may not always be the case.<\/p>\n

\u201cPeople will shop across multiple brands of retailer, including third-tier discounters like The Reject Shop, which will soon be called Dollarama, to access food and groceries,\u201d he said.<\/p>\n

\u201cOr they\u2019ll shop online at Amazon to buy skincare products and shampoos to save on those costs.\u201d<\/p>\n

Additional international grocery brands unlikely<\/p>\n

Addressing reports of potential new international players in the Australian grocery space, Mortimer said this is unlikely due to the small size of our market compared to larger ones globally.<\/p>\n

\u201cWe don\u2019t have the population here to support another big international player to enter the market,\u201d he said. <\/p>\n

\"<\/p>\n

Mortimer doesn\u2019t expect international retailers like Tesco to enter the Australian market.\u00a0Getty<\/p>\n

\u201cThat\u2019s why Walmart haven\u2019t looked at us, why Tesco and Sainsbury\u2019s haven\u2019t looked at us, or Asda, Carrefour … we\u2019re too small. Lidl, the other discounter, they thought were going to come when Aldi entered. Now Aldi\u2019s captured that market, so Lidl won\u2019t come.\u201d<\/p>\n

German chain Kaufland attempted to enter the Australian market, acquiring 29 sites, before abandoning the attempt in 2020.<\/p>\n

\u201cThe food and grocery market in Australia is around about $150 billion a year. If you come in, and you capture maybe two per cent of that, it\u2019s just not enough revenue run your stores,\u201d Mortimer continued.<\/p>\n

\u201cAldi did it successfully. They had two stores in Sydney in 2001, but they were underpinned by 14,000 stores globally, so they could run that until they were able to scale it. <\/p>\n

\u201cAldi is such a good business model. People know what they\u2019re going to get. They\u2019re not going to get a lot of brands, not going to get a lot of choice. But if you\u2019re willing to forgo brand and choice, you\u2019ll get lower prices.<\/p>\n

\"Getty<\/p>\n

Costco has plans to open an additional 20 locations over the next five years.\u00a0Getty<\/p>\n

\u201cAnd in a cost-of-living crisis, when I\u2019m putting $2.80 a litre of petrol in my car today, I\u2019m shopping at Aldi.\u201d<\/p>\n

Costco and Aldi are taking their success and running with it. <\/p>\n

Costco has plans to open an additional 20 locations over the next five years in high-growth areas, and Aldi has also plans to open around 100 new stores nationwide.<\/p>\n

\u201cThe challenge is Costco needs land and space, which has delayed their expansion, but with Aldi, you can have a small Aldi store anywhere,\u201d Mortimer said.<\/p>\n

Aussie jobs and local produce<\/p>\n

Mortimer doesn\u2019t see Costco and Aldi being foreign-owned, in the US and Germany respectively, as an issue \u2013 and despite some criticism, consumer behaviour is certainly reflecting that.<\/p>\n

\"impulse<\/p>\n

Aldi has also plans to open around 100 new stores nationwide.\u00a0Nine<\/p>\n

\u201cThey employ Australians. All of their fresh produce is Australian fresh produce. All their bakery items are Australian, their milk products are Australian,\u201d he said.<\/p>\n

\u201cPossibly, some of their biscuits and some of their cosmetics might be from overseas, but you\u2019ll find that\u2019s the case with big supermarkets as well.<\/p>\n

\u201cUltimately, the food and grocery sector is a highly competitive sector. The narrative of it being dominated by two big players … I don\u2019t think that\u2019s the case any longer. <\/p>\n

\u201cI think Aussie shoppers are actively shopping across multiple brands of retailer in order to save on the costs they incur every single week.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Aussie shoppers are increasingly turning to foreign-owned budget grocery retailers Costco and Aldi as cost of living pressures…\n","protected":false},"author":2,"featured_media":925294,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[64,63,99],"class_list":["post-925293","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-au","tag-australia","tag-business"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/925293","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=925293"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/925293\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/925294"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=925293"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=925293"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=925293"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}