Dick Smith has announced he is shutting down his food company after struggling for years to compete with international supermarket giant Aldi.
Just hours after releasing a scathing open letter to the German discount store, the Aussie businessman announced he had no choice but to close down Dick Smith Foods once and for all – blaming “extreme capitalism” for driving him out of business.
“It is my melancholy duty to inform everyone that after 19 years, I’ve had to make the decision to close Dick Smith Foods,” he said in a statement on his website. “It’s really sad.”
He attached a lengthy open letter to the statement, explaining a number of reasons for the closure – with almost all of them pointing the finger directly at Aldi.
Smith revealed he first considered closing shop in 2010 when sales began to drop significantly, but following a flood of support from consumers, he decided to continue working on the brand. However, he has now lost that fight and is unable to continue trading.
“It’s amazing that foreign-owned Aldi is now our most trusted brand, whereas Coles, Woolworths and Metcash (IGA) have done everything they can to try and keep our products on the shelves, are not as respected,” he added.
“Thanks again to everyone for the wonderful support. Our suppliers are going to keep our products on the shelves as long as they can, so please look for them and try to support them. In some cases, they may have to import from overseas to compete with Aldi, but that’s the marketplace these days!”
In his attached letter, Smith blamed capitalism for young Aussies struggling to find work and while he said he wasn’t being critical of Aldi’s success, he added: “Most consumers always want the cheapest products and don’t link this with fellow Australians – or perhaps their children and grandchildren having a job.”
He said he had written to Coles, Woolworths and Metcash at the same time to thank them all for their support, and pointed out how they had all attempted to keep up by operating with fewer staff on a leaner scale – but his own company had failed.
“It is clear that it will become more difficult for small and medium sized Australian owned food processors utilising Australian produce to compete in the current marketplace,” he went on.
Taking a more direct aim at Aldi, Smith accused owners Karl Albrecht Jnr and Beate Heister of being “secretive”, pointing out they rarely give media interviews, and accused them of enjoying giant profits while Aussies aren’t able to share in the wealth.
Read more: Dick Smith unleashes on Aldi
It comes after he sent a similar scathing letter out hours before, following the news that Aldi was in fact Australia’s most trusted brand. While Woolworths and Coles didn’t even make the cut for the top 10, Aldi reigned supreme, impressing people with its reliability and customer focus.
“We already have a problem in Australia,” he said in his initial letter. “We have 14 per cent youth unemployment and over 20 per cent youth underemployment – that is where our young people can’t get a proper full time career.”
Aldi Australia Chief Executive Tom Daunt hit back at the claims, saying the company employs more than 11,500 Australians.
“We proudly support an Australian first buying policy and have shared our growth with hundreds of Australian manufacturers and thousands of staff who have been direct benefactors of our business growth,” he added.
“We are not a business trying to artificially accelerate market share and we’re not looking to match the store count of our competitors. We do not cut corners, we do not abuse our market power, we do not mislead our customers. We do not avoid tax payments, we do not squeeze our suppliers. We keep things simple and we focus our attention on what matters most to consumers.”