Oxford St aisle wars: Aldi and Woolies set to open opposite one another

LIKE buses on Sydney’s LGBTI strip of Oxford St, you don’t see a major supermarket chain for ages and then two come along at once.

The Darlinghurst thoroughfare is set to be the site of a grocery store battle royale with plans for Woolworths and Aldi supermarkets within metres of each other.

[showads ad=MREC]However, it could be bad news for IGA, whose recently-refurbished store is around the corner from both the new players.

As first revealed by the Star Observer earlier this year, Sydney-based Woolworths has been on the lookout for a Darlinghurst site despite already having a full-sized supermarket close to Taylor Square in Surry Hills.

In a development application lodged with City of Sydney council – to which comment and submissions can be made until tomorrow – the chain has confirmed it is looking to convert two shops and a restaurant on the south side of Oxford St into a 446 sq m supermarket.

The $700,000 store would be considerably smaller than a conventional supermarket, which often come in at around 2500 sq m, but similar to new-concept Woolworths stores that have opened in Erskineville and Woolloomooloo which include a café and a focus on ready-made meals.

Proposed opening hours for the mini-Woolies would be 6am–2am every day, longer than almost any other food store. The supermarket said deliveries would occur between 5am and midnight via a loading dock on Riley St.

Council, rather than Woolworths, will contribute $750,000 towards the cost of a new substation to provide upgraded power to the building.

The site currently houses two shops with short-term leases and a branch of the Iku whole foods restaurant chain.

The Star Observer understands Iku has yet to find another location on Oxford St.

Woolworths’ plans indicate it intends to demolish part of the site’s interior to create a combined space and replace the current shopfronts, including one noted for its historic value.

According to the NSW Government’s state heritage register, the building’s facades are important examples of Federation Freestyle architecture and “make an important contribution to the streetscape”. Woolworths’ own report said the current Iku shop front “has retained a large amount of original fabric, including shop front framing and glazing [and] highlight windows”.

The Woolworths report has justifies the removal of “significant fabric” from the Iku frontage – in particular the windows – on the grounds it is “related to a later fit-out during the 1920s,” some two decades after the building’s construction, and “the proposed shopfronts interpret the buildings’ original shopfronts in terms of design and materials” while photos of the current should be made available.

Meanwhile, the independent Duffy Brothers supermarket chain, within Darlinghurst’s Oxford Square centre, will close in the coming days with staff looking for new jobs.

The owners of the store, some of which have been with the company for 20 years, posted a sign that said the supermarket has been sold to a “major supermarket operator who will redevelop the store to their model”.

Aldi has confirmed to the Star Observer  they will be taking over the Duffy Bros. store, which is less than 100m away from the proposed Woolworths.

“The move to Sydney’s inner city is a part of our long-term commitment to bringing the Aldi difference to more customers across NSW,” a spokesperson for the chain said who added the store was set to employ between 15-20 people.

In June, consumer body CHOICE said Aldi was  Australia’s cheapest retailer, but the chain’s focus on own labels means many well-known brands are unavailable.

Although smaller than Woolworths in Australia, globally the privately-owned German retailer is many times larger than its Australian counterpart.

Darlinghurst Business Partnership president Stephan Gyory told the Star Observer the majors were welcome.

“Everyone needs a supermarket,” he said.

“I brush my teeth and wash my butt just like everyone else, but it will be interesting to see what happens with Aldi opening in Oxford Square.

“If Woolworths attracts other people, then that can’t be bad for Oxford St – it’s an endorsement of the street by a company that knows how to run the numbers.”

A spokesperson for Romeo’s Retail Group, the South Australia company which runs the Oxford St IGA, said they were concerned by the number of Woolworths stores in the surrounding area.

“If competition is wiped out any further we fear for the customer. Having a variety of supermarket brands promotes competition and competition is good for customers.

“If we were to lose sales unfortunately we have to look at our costs, our biggest cost by far is staff and … we could not guarantee there would be no staffing hours cut or staff numbers cut.”

This article was changed on 25 August once Aldi got in back in touch with the Star Observer to add in the company’s response.