Australian consumers are increasingly turning to retailers that offer them more value for money, with the quality and range of products on offer becoming less important. That’s the main takeaway from a Morgan Stanley survey of more than 1,500 local consumers.

The study found that around 44% of those questioned rated VFM as the most important factor when deciding which supermarket to shop at (up from 39% in 2013). In contrast, only 27% said the quality of fresh foods was the most important factor (down from 30% two years ago).

Tom Kierath, analyst at Morgan Stanley noted: “As Aldi and Costco move into the mainstream, they appear to be having an impact on what consumers look for in a supermarket. We think that differentiation within fresh departments has reduced as Coles and Aldi have improved their fresh offer, which has led to consumers placing less importance on this factor. Potentially this is an alarming development for the full line supermarkets as this is one of the only areas where they have a clear point of difference with the discounters, in our view”.

The study also found that consumer awareness of Aldi had grown to 87% (from 82%) as it advertises more and continues to expand, while awareness of Costco had grown to 68% (from 54%). However, it also found that only 52% of those polled had shopped at Aldi in the past year, with just 11% doing so at Costco. Worse, the number of regular shoppers at both chains was even lower (27% and 4%, respectively), suggesting that customers were being attracted by promotions.

However, Morgan Stanley said it expects Aldi and Costco to increase their combined market to more than 13% by 2020.