Dick Smith announced the closure of his 19 year old business, Dick Smith Foods, as a result of Aldi’s success in Australia, at a media conference in Sydney last week.
The business generated over $480 million in retail sales and donated over $10 million to charities across the country.
“Aldi’s ability to reduce overheads and cut prices by using less staff in their stores and replacing home grown products with less expensive overseas suppliers is the main cause,” Smith said. “I am sad it has come to this and thank all Australians for their incredible support for the last 19 years.”
Smith also thanked Woolworths, Coles and Metcash for their support of the Dick Smith Foods brand, which supported thousands of Australian farmers and manufacturers.
“The Aldi formula is simple—reduce the number of products available allowing staffing costs to be reduced and primarily sell in-house brands so prices cannot be compared. An Aldi store typically has 1,700 products in comparison to over 20,000 products at a Woolworths or Coles store,” he said.
“How can Aldi sell so cheaply? It is extreme capitalism. They do not use Australian produce or Australian labour. For example, their peanut butter comes completely out of Argentina where wages are at subsistence levels. Aldi exploits this and sells it all around the world.”
Dick Smith Foods will be wound down over the next 12 months. “At the present time the company is successful and viable but I have made this decision before the inevitable takes place and we are forced into bankruptcy.”
This story was originally published by Appliance Retailer.
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