Woolworths has emerged as the supermarket winning shoppers' dollars amid the cost-of-living crunch, according to new data that shows the retailer gaining market share.
Woolworths leads the pack
The latest figures from market research firm Roy Morgan show Woolworths has increased its share of the Australian grocery market to 27.5% in the three months to December, up from 27.1% in the previous quarter. This marks the highest level for Woolworths since the survey began in 2019.
Coles, meanwhile, saw its market share slip to 26.4% from 26.6%, while Aldi held steady at 14.1%. The data comes as households grapple with rising living costs, with inflation at a 32-year high.
Why shoppers are choosing Woolworths
Industry experts attribute Woolworths' success to a combination of factors, including its loyalty program, Everyday Rewards, and its focus on value through private-label products and weekly specials. The retailer has also invested heavily in its online platform and delivery services, which have proven popular with time-poor consumers.
"Woolworths has been very aggressive on price and promotions, and that is resonating with shoppers who are feeling the pinch," said retail analyst Gary Mortimer of Queensland University of Technology. "They have also improved the in-store experience and expanded their range of own-brand products, which offer better margins and lower prices."
Cost-of-living pressures drive changes
The cost-of-living crisis has prompted many Australian households to reassess their spending habits, with groceries being a key area where savings can be made. Shoppers are increasingly turning to discount supermarkets like Aldi and Costco, but also to the major chains' budget ranges.
"Consumers are trading down from premium brands to home brands, and they are looking for the best value for money," Mortimer said. "Supermarkets that can offer that are going to win."
Outlook for the supermarket sector
With inflation expected to remain elevated for some time, the battle for supermarket customers is likely to intensify. Both Woolworths and Coles have announced price freezes on hundreds of products, while Aldi continues to expand its store network.
"The next few months will be crucial," Mortimer said. "Shoppers are becoming more price-sensitive, and loyalty can be fickle. The winners will be those that can consistently deliver on value and convenience."
