A new report by consumer advocacy group Choice reveals that the price difference for a basket of 14 grocery items between Coles and Woolworths is just 75 cents for non-promoted lines. In a trading update, the Woolworths CEO has stated they have a policy of consistent prices in most areas (except remote locations), and inferred other supermarkets had sharper pricing in locations with a strong competing store. With prices available online for both majors it is not surprising that prices are fairly similar between the two. However, Aldi offers significantly lower prices, saving Australians nearly $15 on average compared to the other two chains (on the basket of 14 items). The findings come amidst allegations of price gouging and multiple inquiries into Australia’s concentrated supermarket sector, including one by the ACCC. Choice has been granted 3 years funding to continue monitoring supermarket prices. 

Choice conducted undercover shopping at 81 supermarkets in 27 locations in March, discovering that a basket of 14 common items costs $51.51 at Aldi, while the same basket costs $68.58 at Woolworths and $69.33 at Coles. When promoted prices are taken into account, the basket of tracked items was cheaper at Woolworths than at Coles by $3.59, however Aldi with their everyday low prices remained the cheapest. 

The report highlights regional price disparities, noting that areas without Aldi stores, like Tasmania and the NT, face higher prices. The dominance of Coles and Woolworths, which together control 65% of the market, is criticised for limiting competition. Aldi’s share has risen to 10% nationally with a growing number of households shopping at Aldi monthly increasing by 4% to 5 million households. No doubt the cost-of-living pressures have driven shoppers to increase their visits to Aldi in hopes of getting more value. 

One unexpected finding is regional locations fared better than capital cities for the basket of 14 items. Note there are only 15 stores in the sample that were regional locations and as stores are selected in clusters with all 3 supermarkets present in a location, this would mean there are only 5 regional areas Australia wide covered in the sample which is quite limited. 

Whilst this report has created captivating headlines, the small sample size of 27 locations nationally, with NT & Tas using IGA stores due to no Aldi presence and only for the month of March. With the ongoing funding, it would be assumed the basket of 14 items tracked will remain the same so as to monitor trends and compare like for like however one issue is now the supermarkets may be incentivised to benchmark the 14 items and drive those prices to a more competitive level with Aldi; and possibly not a great outcome for Apple growers who not seen the wholesale price change over the past 20 years and the retail price only increase by 50 cents in that time. 

SOURCE:

https://www.abc.net.au/news/2024-06-20/choice-supermarket-prices-report-coles-woolworths-aldi-iga/103997340

https://east-fruit.com/en/news/apple-growing-in-australia-is-dying-because-prices-havent-grown-for-20-years/