Sources have told ChannelNews that Aldi house brand sales of ovens, microwaves and washing machines are impacting house brand appliance sales at Masters, howver a move to branded products could face a stumbling block with several big brands telling ChannelNews that they would not supply Masters.
The Aldi Sterling house brands are primarily supplied by Tempo who also supply both large white goods and small appliances to the mass retailer.
The success of Aldi appliances is said to be the reason that Bunnings has decided not to expand their appliance products claim insiders.
Sales figures released in the USA earlier this week by Lowe’s a key partner in Masters showed that Masters losses are growing with Woolworths the other major partner now facing some tough decisions about the future for the struggling retailer.
The Lowe’s results confirm the worst fears of investors, with Masters’ total losses up 20 per cent year-on-year.
The Australian reported that at this rate Merrill Lynch believes Masters will rack up a loss of $290 million this year and as much as $350 million in 2017, reinforcing views the flood of red ink is unsustainable and that Woolworths needs to close down or sell the chain.
The sliding losses also come despite Woolworths (WOW) rolling out a new format which is delivering improved sales and customer feedback across the Masters network of stores.
Lowe’s, which owns one third of the Masters joint venture with Woolworths, said in its latest quarterly update that it had booked a loss of $US46 million for the nine months to October 30 on its Masters stake.
Since opening its first Masters store in 2011, Woolworths and Lowe’s have poured more than $3.3 billion into the loss-making hardware venture.
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