Aldi is attracting more wealthy white-collar shoppers, but must improve its fresh food to increase its appeal still further, analysts say.
A UBS report says the German discount retailer's customer base has expanded beyond the pensioners and lower income families it targeted when it first arrived in Australia in 2001.
"Aldi is attracting a wealthier, more white-collar shopper who wants more range," UBS analyst Ben Gilbert said.
"We continue to believe there is no impediment to Aldi lifting its share in family and wealthier demographics."
The report said Aldi was winning new shoppers at an accelerating rate, but it needed to improve shoppers' perception around its fresh offering to increase that further.
"The key reason shoppers do not purchase fresh at Aldi remains quality and a preference to shop at a specialist," Mr Gilbert added.
"Fresh represents the greatest opportunity to grow the basket given Aldi remains comparatively underpenetrated in fresh."
Aldi continues to steal marketshare from its rivals, with Metcash the most at risk, followed by Woolworths, which appears to be losing ground to Aldi at "an accelerating rate," the report claims.
Coles was said to be minimising Aldi's impact the best.
"We believe Aldi is winning sales from all retailers, driven by roll-out and a broadening customer base," Mr Gilbert said.
"That said, we believe Aldi's like-for-like growth has slowed over the past 12 months, driven by Coles' Every Day Value strategy."
It said Coles was expected to lose sales to Aldi at a rate of about $332 million a year to FY19, while Woolworths was expected to lose $476 million.
UBS estimates Aldi to have an 11 per cent share of the east coast grocery market, with more than $7 billion in sales and about six per cent of the national market.
It expects the German retailer to reach $10.6 billion in sales by FY19 and to have about 10 per cent share of the national grocery market by FY20.
"Aldi is now the most profitable major supermarket chain in Australia, generating a profit before tax margin of about 5.2 per cent in 2013, and is, in our view best positioned to win a price war," the report said.
Aldi currently has about 400 stores, including nine recently opened in SA and is targeting more than 600 stores nationally in coming years.
It opened its first SA stores in March and is set to open its first WA stores later this year.
