Supermarket Shopping In Australia: The Rise Of Woolworths And Coles

One of the most commonly voiced concerns about supermarkets is that Woolworths and Coles are so dominant that suppliers are forced to accept dubious and unprofitable terms if they want their products sold there. What does history tell us about who has dominated the Australian supermarket scene?

Picture by Marianna Massey and Ian Waldie/Getty Images

Data from consultancy Planet Retail (which I spotted in the subscriber-only Australian Financial Review) highlights the changing nature of the Australian supermarket space in the past four decades. (These figures have been rounded, which means some add up to over 100 per cent.)

In 1975, Woolworths had just 16 per cent of the market, Coles had 18 per cent, and other players had 67 per cent. By 1985, Woolworths and Coles each had 23 per cent, with other providers still accounting for 55 per cent.

It wasn’t until 1995 that the ‘other’ share fell below half, accounting for 43 per cent. Woolworths took the lead with 32 per cent, while Coles had 26 per cent. Fast forward to 2005 and Woolworths had 42 per cent, Coles had 32 per cent, and other accounting for just 26 per cent. Planet Retail’s most recent figures, for 2009, show Woolworths with 46 per cent, Coles with 32 per cent and other with 22 per cent. Those numbers predate the launch of Costco, but with only three Australian stores it won’t make a major difference. Similarly, while ALDI has grown rapidly over that time, it’s still a small fraction of that 22 per cent, which comprises independent stores (many branded as IGA) and smaller regional chains.

Bottom line? You can definitely see that Woolworths and Coles have grabbed share from the independent sector, which means there are fewer options for food producers to sell their products. It’s worth pointing out that not all research supports the “two big bullies” thesis. When the ACCC investigated bargain milk pricing, for instance, it found no evidence that the pricing schemes had caused harm to farmers. And while consumers might feel sympathetic, we still end up buying bargain house brand goods in huge quantities.

Lifehacker’s weekly Loaded column looks at better ways to manage (and stop worrying about) your money.

The Cheapest NBN 50 Plans

Here are the cheapest plans available for Australia’s most popular NBN speed tier.

At Lifehacker, we independently select and write about stuff we love and think you'll like too. We have affiliate and advertising partnerships, which means we may collect a share of sales or other compensation from the links on this page. BTW – prices are accurate and items in stock at the time of posting.


21 responses to “Supermarket Shopping In Australia: The Rise Of Woolworths And Coles”

Leave a Reply