The resurgence of Woolworths supermarkets in 2017 has been well documented, but new survey data released by Roy Morgan has revealed just how much impact it has had on Australia’s more than $100 billion grocery market in the last 18 months.
In the twelve months ended December 2017 Woolies increased its market share by .8 per cent, bringing its total to 32.2 per cent, while rival Coles’ market share only increased by 0.1 per cent to 28.8 per cent.
Woolworths’ gains were neck and neck with international entrant Aldi, whose market share also increased by 0.8 per cent, bringing its total size of the pie to 12.1 per cent.
Independents were the big losers, with IGA supermarkets shedding 1.1 per cent market share to 7.4 per cent in 2017.
As the giants invest more heavily in fresh, independent non-supermarket retailers such as butchers, fruit shops and markets also moved backwards, decreasing by a combined 0.8 per cent to 11.8 per cent.
Non-supermarket groups still control the highest portion of the circa $40 billion fresh food market though at 30.2 per cent, with Woolworths next at 26.7 per cent and Coles in third at 24.5 per cent.
The current aim of the major supermarkets to be positioned as being strong in ‘fresh food’ is a result of it being seen as an area of major growth potential,” Roy Morgan’s industry communications director Norman Morris said.
Woolworths, Coles and Aldi are all investing heavily in fresh as a growth channel considered to hold superior returns to cold grocery in the medium term, although Morris Roy Morgan warns that pressure in the market will likely escalate with Wesfarmers’ decision to demerge Coles.
“When Coles becomes listed on the ASX, it is likely to lead to increased analysis and pressure on their financial results and the obvious comparison with Woolworth,” Morris said.
Roy Morgan’s survey of more than 50,000 shoppers, including more than 12,000 grocery buyers, also found that more than two-thirds of consumers are cross shopping across different supermarkets.
72.7 per cent of grocery buyers said they shop at Woolworths, but only 8 per cent only shop there; whereas 70 per cent of buyers shop at Coles but only 6.6 per cent shop it exclusively.
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