Can Coles and Woolworths counter the rise of Aldi?

I recently visited the UK to learn more about the UK economy, in particular UK retailers, and to see if the UK market held any lessons for Australian businesses. The UK supermarket industry is very different to Australia, with four major supermarket chains and two hard discount chains all fighting for market share. And just like in Australia, Aldi has made a significant impact in the UK, with the major supermarkets reducing prices substantially on the back of its presence. What do Coles and Woolworths need to do to retain customers in Australia and how will this affect margins across the industry? (VIEW LINK)