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Supermarket weep: Woolies’ share continues to fall and Coles and Aldi split the proceeds

Source: Roy Morgan Single Source Australia, October 2015 – September 2016, sample n = 11,621 Australian Grocery Buyers 14+.

Australian grocery buyers spent almost a billion dollars less at Woolworths over the past year, and took it across the street to Coles and down the road to Aldi, Roy Morgan Research shows.

The latest quarterly Supermarket Currency report from Roy Morgan Research shows Australia’s grocery buyers spent $89.8 billion at supermarkets during the 12 months to September 2016—87 percent of the total $103 billion spent on groceries overall. 

Roy Morgan Research estimates Australians spent $32.6billion at Woolworths in the past 12 months—36.3 percent of all supermarket expenditure nationally. This is down $825million compared with the previous year, representing a decline in market share of 1.4 percentage points.

This is the second consecutive year that expenditure at Woolworths (and its market share) has declined— from a peak of $34.4billion in the year to September 2014, or 40% of that year’s market share.

Shares of the $89.8billion spent at Supermarkets in 12 months to September 2016

Source: Roy Morgan Single Source Australia, October 2015 – September 2016, sample n = 11,621 Australian Grocery Buyers 14+. Dollars and percentages may not add to totals due to rounding.  

It’s a very different story across the road: grocery shoppers spent $29.8billion at Coles this past year, $1.1billion more than the year before. Coles’ gained 0.9 percentage points in market share, up to 33.2 percent.

Woolworths’ loss was not solely Coles’ gain: Aldi claimed the other 0.5 percentage points of the market. The German discount supermarket hit a new high as its swivelling seated checkout staff took in 12.5 percent of Australia’s supermarket dollars ($11.2billion). 

IGA gained 0.3 percentage points of market share year-on-year to 9.8 percent ($8.8 billion), while the share for all other supermarkets combined fell by the same amount, down to 8.1 percent ($7.3billion).

Michele Levine, CEO – Roy Morgan Research, says:

“With almost $90 billion a year spent at supermarkets, every percentage point change in market share is equal to nearly a billion dollars lost or gained. A gap of only 3.1 percentage points now separates the two supermarket giants Coles and Woolworths, down from eight percent just two years ago, while Aldi has hit a new high and cemented its third spot ahead of IGA.     

“Price wars between Coles and Woolworths, and the rise of discount chain ALDI, appear to have stalled growth in the overall market. Between 2008 and 2014, the total national spend at supermarkets grew an average four percent annually, adding around three billion dollars a year to the tills.

“Then from 2014 to 2015, supermarket spend grew by only 1.8%, and by only 1.2% from 2015 to now—or only a billion dollars more than last year. As overall expenditure slows, market share is more important than ever for supermarkets: getting more grocery buyers into the stores, and claiming a larger share of their grocery budgets.

Most Woolworths shoppers also shop at Coles, and vice versa. Each dollar taken across the street or down the road adds up. For Woolworths, it added up to $825 million taken out of their tills this year. The latest quarterly Supermarket Currency report to September 2016 from Roy Morgan Research again delivers an informed overview of the Australian grocery landscape, with analysis of the underlying consumer research ready to yield further insights into where different segment of buyers take their grocery dollars, and why.”   

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About Roy Morgan

Roy Morgan is the largest independent Australian research company, with offices throughout Australia, as well as in Indonesia, the United States and the United Kingdom. A full service research organisation specialising in omnibus and syndicated data, Roy Morgan has over 70 years’ experience in collecting objective, independent information on consumers.

Margin of Error

The margin of error to be allowed for in any estimate depends mainly on the number of interviews on which it is based. Margin of error gives indications of the likely range within which estimates would be 95% likely to fall, expressed as the number of percentage points above or below the actual estimate. Allowance for design effects (such as stratification and weighting) should be made as appropriate.

Sample Size

Percentage Estimate

40%-60%

25% or 75%

10% or 90%

5% or 95%

1,000

±3.0

±2.7

±1.9

±1.3

5,000

±1.4

±1.2

±0.8

±0.6

7,500

±1.1

±1.0

±0.7

±0.5

10,000

±1.0

±0.9

±0.6

±0.4

20,000

±0.7

±0.6

±0.4

±0.3

50,000

±0.4

±0.4

±0.3

±0.2