Coles and Woolworths are the two biggest supermarkets in Australia, and between them they have a national market share of 65%. This dominance enables them to shape the prices Aussies pay for their weekly shop.
However, over the past few years, many shoppers have voiced frustrations over what they perceive to be skyrocketing grocery bills, sparking questions about why prices seem to be spiralling out of control.
In this post, we’ll explore why Coles and Woolworths’ prices have risen so steeply, how their dominance impacts Australian households, and, most importantly, what you can do to save money on your grocery shop.
How much have prices gone up?
The first thing that needs to be established is whether the prices Coles and Woolworths charge for groceries have actually gone up. Well, according to choice.com.au, they most certainly have – in Sydney at least.
Since 2019, the price of bread from Coles went up 37% on average and a whopping 56% from Woolworths. Similarly, cheddar cheese has gone up by 19% at Coles and 25% at Woolworths, and instant coffee has risen by 18% at both.
Woollies seems to be the bigger offender of the two, with cereals rising on average by 26%, pasta by 11%, and kitchen staples by 18%.
This is just a snapshot of some of the many increases in grocery prices at both stores. So, it seems clear that customer perception of price gouging might be correct.
Why Are Prices at Coles and Woolworths So High?
There are several reasons why the price of your weekly shop has risen at Coles and Woolworths. The ongoing cost of inflation has been a contributing factor, with the supply chain being disrupted by the COVID-19 pandemic, the war in Ukraine, and rising fuel costs.
But other factors play a part, too, including both company’s desire for profit to appease their shareholders, their overall market power and general lack of competition, and that customers are still prepared to pay the prices they charge.
Smart Hacks to Save Big on Groceries
So, what can you do to reduce the amount of money you spend on groceries while still being able to buy what you want?
Here are some practical tips to keep your grocery bills under control:
- Shop at Aldi
Aldi launched in Australia in 2001 and since then has consistently undercuts Cole and Woolworths on staples like bread, milk, and fresh produce.
If you live near an Aldi, you should consider doing the majority of your grocery shopping there because you will likely make decent savings every week.
The great thing about Aldi is that they offer constantly low prices that focus on simplicity and affordability. This means they don’t invite customers to spend more money through upselling or marketing gimmicks.
- Consider Meal Delivery Services
If there isn’t an Aldi near you, or you just don’t feel like cooking one or two nights a week, a great alternative is a ready-meal home delivery service like Macros.
They offer a wide range of authentic home-cooked meals at reasonable prices that cover several different cuisines, including Indian, Italian, Mexican, and Chinese.
Additionally, they are specifically designed for healthy eating, so they are perfect for those who want a calorie or carb-controlled meal, are trying to lose weight, or are following a Keto or plant-based diet.
- Shop Just Before Closing Time
Most people tend to do their grocery shopping earlier in the day. But if you head to Coles and Woolworths about 30 minutes to an hour before they close, you can often pick up goods at significantly reduced prices.
This is particularly true of freshly made foods, like roast chicken, breads, pastries, and some fish and deli items that might not last until the following day. In such cases, these items can be reduced in price by as much as 50% or more.
- Buy Staples in Bulk
Coles and Woolworths do regularly put some products on special offer, so if you are in a financial position to do so, it is a good idea to buy these items in bulk if you can.
This is particularly true for pricier items like washing powder, olive oil, confident grooming and healthcare products, and toilet paper.
If you have enough freezer space, you can also save a good amount of money on meat.
- Shop at Fruit and Vegetable Markets
The price of fruit and vegetables at Coles and Woolworths can be quite high, which is why you should try to shop at fruit and vegetable or farmer’s markets as often as you can.
Usually, you can pick up these items much cheaper because they are sold to you directly by the people who harvest them. As they are packaged in bigger dominations, i.e., 1 kg bag of zucchini or green beans, it means you can also eat healthier over the week.
You can find your nearest market by searching here.
- Try Generic Brands
The price of a product is determined by the value associated with its brand name. Therefore, the more trusted the brand name, the more expensive the product is priced.
For this reason, it is worth trying products of supermarket private-label products (like Coles’ and Woolworths’ home brands) or other cheaper brands you are not familiar with.
You’ll be surprised that, in many cases, they are made by the same manufacturers, which means they offer similar quality at a lower price.
Ultimately, you can let your taste buds decide. But if you don’t mind the cheaper home brands, you can save a lot of money on your weekly shop over the year.