Woolworths and Coles need to target Aldi's weaknesses – its limited range, lack of service and absence of value-added meals – rather than try to compete with the fast-growing discounter on price or private-label products, says a British retail expert.

Kantar Worldpanel director Edward Garner has warned that Australia's major grocery retailers are facing a "new normal" of lower sales and weaker margins as the sector becomes more price-competitive and Aldi gains market share.

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However, the British retail veteran – the keynote speaker at the Australian Food & Grocery Council's annual executive conference – says the major chains can avoid a UK-style grocery price war by taking lessons from successful retailers such as Britain's Waitrose and France's Leclerc.

"The discounters won't totally rule the world; I can see limits to their growth and there are lessons to be learned from France, where the discounters are in decline," Mr Garner told Fairfax Media ahead of the AFGC conference on Thursday.