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Spend at Woolies stalls for second consecutive year

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 per cent of the total $103 billion spent on groceries overall.

Roy Morgan Research estimates Australians spent $32.6 billion at Woolworths in the past 12 months—36.3 per cent of all supermarket expenditure nationally.

This is down $825 million 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 $34.4 billion in the year to September 2014, or 40 per cent of that year’s market share.

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

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

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 per cent of Australia’s supermarket dollars ($11.2 billion).

Michele Levine, CEO – Roy Morgan Research, said: “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.

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

“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,” Ms Levine said.

“Then from 2014 to 2015, supermarket spend grew by only 1.8 per cent, and by only 1.2 per cent 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.”

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