Supermarkets: Australia and The UK Compared

anz 1511 I have written about supermarkets before a few times, you’ll see some links sprinkled throughout this article that will take you to them. I’d not written about supermarkets though for Australia and New Zealand magazine, not until recently anyway. This article appeared in the magazine’s November edition and they gave it the following title.

Supermarket sweep

Regular readers will know that I like to talk about pubs, places, beaches, barbecues and pubs. Today I’m going to do something different, today I’m going to talk about supermarkets.

I used to go to supermarkets in the UK far more than I do here in Australia, you’ll find out why very soon. Anyone moving to Australia can say goodbye to Tesco and Sainsbury and most of all the other eight or so major supermarkets that you have in the UK. So what would you get instead? You’ll get Woolworths and Coles and very little else.

coles

woolworths

So, how do they compare?

Walk into any one of those big supermarket chains in the UK and you’ll get groceries, of course, but you’ll also find quite large sections selling other things. Clothes, magazines and newspapers, toys, beers, wines and spirits, electrical goods and maybe even sports or office equipment. In some of them you’ll even find a small restaurant or cafe serving fresh cooked hot food. Perfect for replenishing the energy you expended loading up your trolley with all that stuff.

Here, in our supermarkets, you’ll pretty much just get groceries and not much more. There will be some tiny sections selling batteries, a few light bulbs, pads and ballpoint pens, weed killer for the garden, maybe some pest control products and other general essentials, but nothing anywhere near as big as the UK non-grocery sections.

Now you know why I rarely go to supermarkets here.

That is not to say though that Woolworths, and the Wesfarmers owned Coles, won’t sell you this stuff. They’ll just do it from other stores. Between them they own Australia’s two biggest home improvement chains, three massive discount department store chains, an office supplies chain and about eight major bottleshop (beer, wine and spirits) chains.

They also sell almost half of all Australia’s retail petrol. So there really isn’t much you can’t get from these two companies. They are so big they both make the world top 20 retailers list.

Is this a problem?

Many think it is, suggesting this is an unhealthy duopoly that is not good for Australians. Let’s look on the bright side; it’s better than a monopoly. At least these two giants are fighting each other for market share.

The landscape does appear to be changing in recent years though, Aldi began trading in Australia in 2001 and since then their stores have been springing up like mushrooms. They have already grabbed around 11% of the east coast market. Costco arrived in Australia in 2008 and now have seven megastores here and German giant Lidl are due to arrive at any moment.

The competition is already looking healthier.

What’s really important though are the prices. Let me just check. 1 kg of white sugar from Tesco’s; 59p. Both of our supermarkets are selling the same for one dollar. Loosely speaking, not much in it. Not enough data you say? Okay, I have done a couple of comparisons on my website before, buying 12 random items each time.

Things like mustard, bread, milk, coffee, eggs, salmon, beef and rice. The first time my shopping basket was five dollars cheaper in Australia, the second it was eight bucks cheaper in the UK. This fluctuation was more to do with the different exchange rates between the pound and the dollar than anything else.

The reality is, there really isn’t much in it between our two countries, duopoly or not. The price of groceries in Australia is not a deal breaker for anyone thinking of making the move.

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{ 4 comments… add one }
  • Todd February 21, 2016, 9:00 am | Link

    We have been having good luck with Aldi’s. They are very similar to the ones in New York State we are used to using. Here in Geelong, there appears to be a huge variety in the supermarkets. One of the Coles in Waurn Ponds is similar to ones you describe in the UK. Others are barely more than convenience stores. The larger one has a clothing section, housewares section and an extended “pharmacy lite” section with soaps, baby supplies and pain relievers. The all seem to include a liquor store as well in this area. Your insight into the duopoly is also helpful and we will be checking out an IGA near here tomorrow. It did seem a little odd that the prices of meat at Coles and Woolworths has been the same the last 4 weeks.

    • BobinOz February 22, 2016, 6:38 pm | Link

      Sounds like some of the larger stores are widening their range. It’s not unusual for some supermarkets to have a very small clothing section, maybe a 3 metre section in one aisle, selling socks, pants, stockings, pyjamas and not much else. I’ve never seen a supermarket with a large clothing section though, maybe that’s about to change from what your are saying Todd.

      The liquor laws are different in each state, bottle shops are definitely separate from supermarkets in Queensland, I believe bottle shops in New South Wales are within the supermarket but accessed only by a separate door.

      Is that what you have there in Victoria? I agree with you on Aldi, we quite like them as well.

  • Frank Gilling February 13, 2016, 5:35 pm | Link

    Hi Bob, enjoyed your article and would like to add a bit more information.
    There are other supermarket chains in Australia none of which got mentioned.
    For example the IGA is probably much much larger than Aldi and are represented in far more places. For that matter IGA is far far more available to many Australians than say Costco which only seems to be located in capitol cities. Once you get out in the real Oz, a few hundred Klms from the coast the real supermarkets serving large and small communities alike are as follows;
    IGA as previously mentioned. It is probably the third largest chain in Australia and the largest chain serving rural communities. There are no Coles, Woolies or Aldi to be seen anywhere for hundreds of Klms.
    Next in no particular order are
    Safeway
    Foodworks
    Spar (I believe this is owned by Woolworths)
    Bi-Lo (Owned by Coles)
    I travelled the backroads and backtowns in Qld, NSW, NT, WA and Vic for 4 years and often had to rely on IGA or one of the 4 listed above for groceries. Hats off to those who service to outer reaches of the various states.
    Cheers

    • BobinOz February 15, 2016, 4:55 pm | Link

      You are quite right to point this out Frank, I maybe should have mentioned IGA. But I have to tell you that with the rapid expansion of Aldi, they now do have a bigger market share than IGA.

      Latest figures are Woolworths 38.5%, Coles 31.8%, then Aldi at 11.6% followed by IGA at 9.5%. Others account for 8.5%. Source: Roy Morgan

      It is also correct of you to point out that the larger cities are dominated by Woolworths and Coles, but these smaller supermarkets do service the more rural areas where I imagine it’s just not profitable enough for the big boys.

      Thanks, Bob

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