Meat, fruit and vegetables dominated Australia’s $40 billion fresh food market as the major supermarkets stepped up their efforts to gain market share in the category last year, according to Roy Morgan.

Releasing the latest edition of its supermarket grocery currency report, the research body has found that Woolworths and Aldi appear to have been the two best fresh performers in 2017, based on survey data from 12,000 grocery buyers.

It comes as a resurgent Woolworths looks to capitalize on growing demand for fresh produce by investing in quality and range, while German entrant Aldi has refurbished a large portion of its store network to focus more heavily on fresh food.

The report found that meat, fruit and veg together representing more than 79 per cent of the market.

Fresh Deli (6.8 per cent), fresh bread (7.5 per cent) and fresh seafood (6.4 per cent) represent the remainder of the fresh food market.

A report released by Roy Morgan last week found that Coles and Woolies now control more than half of the fresh meat market in Australia, at the expense of independents.

“The battle to be Australia’s ‘fresh food’ leader has hotted up in recent years as Coles has mounted a challenge to the traditional ‘fresh food people’ at Woolworths,” Roy Morgan chief executive Michele Levine said.

“For the first time the ‘Big Two’ supermarket chains Woolworths and Coles now capture over 50% of Australia’s $40+ billion fresh food market.”

“The disruption to Australia’s supermarket duopoly caused by the entrance of new competitors including Aldi, and in the coming years Kaufland and Lidl, is driving the current market leaders Coles & Woolworths to step up their game and increase their market share ahead of the intense competition these new ‘cashed-up’ rivals will bring to the broader Australian supermarket retailing landscape and will intensify the pressures on smaller specialist retailers,” she continued.

Morgan Stanley analysts have predicted that the entry of Schwarz Group owned Kaufland into the Australian market will make it more difficult for the majors to gain share in fresh.

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