Australian Supermarket and Grocery Industry

Running head: ECONOMICS 1
Australian supermarket and Grocery industry
Name
Affiliation
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Abstract
In this paper, emphasis shall be put on providing a comprehensive
analysis of the supermarket and grocery industry will major focus on
Woolworth and Coles. The paper shall provide a brief introduction of the
state of the supermarket and grocery industry of Australia such the market
dominants, companies involved, revenues and others. The paper will also
present an overview of competition in the supermarket and grocery industry
and the current developments. Pricing and non pricing strategies used in
order to increase sales and revenues will also be discussed. Finally, a logical
conclusion providing a clear summary of the important issues discussed in
the paper will be drawn.
Introduction
The Australian supermarket and Grocery industry employs over three
hundred and six thousand people (360000) and its overall size is worth
$102.0 billion. The Australian super market industry is likely to continue
expanding due to an increase in demand of vegetables, organic fruit and
other premium food products.
The industry comprises of a number of players which include among
others; Meta cash with a share of 7.4 percent, ALD1 9.2 market share, Coles
30.3 market share and Woolworth 37.2% market share. There has been
refocusing of the wool worth food divisions following the sale and closure of
its underperforming Business of hard ware in the period of 2016. Wool worth

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has been involved it’s self in cut pricing strategies to effectively compete
with ALDI and Coles. It is important to note that there has been a general
decline in wool worth average prices by a level of 2.1 percent since the
period of 2016- 2017 (Collier,2011). It is clear that wool worth is Refur shing
its overall old fortune stores and heavily improving its overall customer
service. There has been some market share gained by Wool worth due to the
improvement made after a number of years. As per the current statistics, it
is clear that wool worth total share in the market is expected to continue
improving. The period of financial 2016-2017, show Cole registering poor
performance levels when compared to the previous years. Cole is currently
experiencing intense competition and pressures from its competitors like
ALDI and wool worth.
Cole supermarket was founded in the year 1914 and has its overall
headquarters in Melbourne. Throughout the area of Australia, Coles has a
total of eight hundred and seven super markets (807). The supermarket
employs total of one hundred thousand people (100,000).The online
shopping for the company is Coles online. Wool worth supermarket was
founded in the year 1924 and is operated and owned by Woolworth limited
(Collier,2011). The supermarket majorly focuses in the sell of packaged
foods, meat, fruit, vegetable and other groceries.
Throughout the area of Australia, the total stores operated by
Woolworth are equivalent to one thousand (1000), convienience stores

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carrying the same logo total to nineteen and supermarkets are nine hundred
and seventy six (976). Therefore these two giant super markets are the
overall leaders of grocery and supermarket industry of Australia. However,
new companies have entered in the industry and are attempting to change
the market structure of the super market Business. None the less, the
supermarket industry is one of the fastest growing industries in the area of
Australia which is attracting a number of players. Meaning that there is fierce
competition in the industry
Overview of the state of competition in the supermarkets or
grocery industry in Australia
Two important players dominate the Australian supermarket or grocery
industry and they include Woolworth and Coles. Studies carried out by the
Australian competition and consumer council reveal that Woolworths and
Coles have a market share equivalent to eighty percent (80%) in the
industry. The supermarket industry is currently experiencing a number of
price wars which have been in existence since the year 2011. The two
dominant companies such as wool worth and Coles have devised as
competitive mechanisms other than price in order to survive in the market. It
is clear that there is fierce competition in the in the supermarket industry.
It should be noted that the supermarket sector has experienced a
number of important developments in the past five years. There has been
expansion of ALDI and various new players such as Costo have effectively