Aussie Supermarket Price Wars: Aldi the Cheapest, Says Survey

While a basket of 14 items is cheapest at Aldi, consumers in Tasmania and the Northern Territory are paying more due to a lack of competition.

Aldi Supermarkets were found to be the cheapest in Australia. Susan Mortimer/The Epoch Times

A new survey detailing Australia’s supermarket prices is showing that shoppers in Tasmania and the Northern Territory are paying more at the checkout than the rest of Australia.

Consumer group Choice looked at the basket price of 14 everyday items across retailers in the supermarket space and found Aldi to be the cheapest.

Aldi is a global discount supermarket chain that originated in Germany. Known for its cost-effective pricing and efficient operations, it entered the Australian market in 2001 and has since expanded rapidly, challenging the dominance of established local players like Woolworths and Coles.

However, complicating the data was the fact Aldi does not have a presence in Tasmania or the Northern Territory, and that lack of competition has impacted consumers in those areas already struggling with the cost of living crisis.

A basket of essentials from Aldi was found to be 25 percent cheaper than the two other major players, coming in at $51.51 (US$34.36) versus $69.33 at Coles and $68.58 at Woolworths. The basket did not contain any items on special.

With Aldi not present, Tasmanians paid $68.90 on average for their comparable items, while those in the territory forked out $68.82.

“Our latest report shows that Aldi continues to offer the best value for Australian shoppers on a range of groceries,” said Choice CEO Ashley de Silva via the group’s website.

“We sent mystery shoppers to regional and metropolitan supermarkets nationwide to record prices for 14 grocery items, and we'll continue to deliver quarterly price analysis reports so Australians can stay on top of where they can find the cheapest groceries, to help relieve some of the pressure on household budgets.”

Coles 'disputed the Choice survey findings arguing their own analysis found their products were cheaper than the published results. Susan Mortimer/The Epoch Times

Supermarket Sector Response

In a response to questions from the Epoch Times, Coles disputed the Choice Survey’s findings saying it was “unclear how this analysis was conducted and whether the basket is a like-for-like comparison across retailers, ”and pointed out Choice’s data was compiled in March and “was not a reflection of current prices.”

“Our analysis last week comparing the same basket in NSW shows customers can purchase these products for $59.35 at Coles,” said a spokesperson for Coles.

Coles also challenged Choice’s disclosure of whether or not the test basket included “proprietary brands available at Coles (e.g. Lipton, Wonder bread), or Coles’ Own Brand product range, to make these comparisons or pack sizes.”

“We are always working hard to deliver value to our customers, particularly with ongoing cost of living pressures including higher mortgages and rents, energy and fuel,” said the spokesperson.

“Coles offers a wide range of choices, including affordable own-brand essentials, premium selections, and a range of popular brands, in addition to services including home delivery and Click and Collect. ”

In light of the survey’s results, a Woolworths spokesperson responded with instructions on where consumers can access their best deals;

“Customers can use our app or website to find half-price specials, other promotions and we’re seeing almost 110,000 customers a week use the Best Unit Price filter on our app and website.”

Accusations Of Anti-Competitive Behaviour In Industry

Woolworths consistently holds the largest share of the Australian supermarket market recording a 37 percent share in the last financial year, trailed by Coles with 28 percent, and Aldi with 10 percent. Minor players like IGA and Foodland make up the remaining quarter.

This level of market concentration enjoyed by the big brands has raised concerns about reduced competition and limited choices for consumers.

In February this year, the Australian Competition and Consumer Commission (ACCC) was directed by the federal government to undertake a year-long investigation, the first since 2008, into the supermarket sector focused upon alleged price gouging by supermarkets and the relationship between wholesale, and retail prices.

Via a statement, Treasurer Jim Chalmers said the government wanted “a fair go for families and a fair go for farmers.”

“Australians are under cost‑of‑living pressure, and we know that a lot of that pressure is piled on at the cash register. This is about making our supermarkets as competitive as they can be so Australians get the best prices possible, “Mr. Chalmers added.

Assistant Minister for Competition, Charities and Treasury Andrew Leigh was more scathing.

“Competition is the consumer’s friend. Economics teaches us that monopolies tend to overcharge and underdeliver,” he said.

“In a highly concentrated market like Australia’s grocery sector, the risk of price gouging is high and that’s especially true when the rising cost of living is hurting so many Australians.”

In response to more extreme calls for the government to abolish the Woolworths-Coles duopoly, Productivity Commission Chair Michael Brennan said Australian consumers would be faced with even higher prices.

“It’s easy to look at that aggregate and say we need to break that down. We need competition,” he told the National Press Club in August 2023.

“[But] in many cases, consumers feel better off when they’ve got a Coles or Woollies because the prices are cheaper and the range is better.”

He added that the two supermarket giant’s ability to outperform rivals created the duopoly rather than issues with competition or consumer laws.