The ACCC's supermarket inquiry has shone a spotlight on Coles and Woolworths' high prices. But 76 per cent of shoppers still head to either store for their primary grocery shop.
Research shows 78 per cent of consumers concentrate the largest share of their total supermarket spending at either Coles or Woolies. Coles and Woolworths have continuously been under the spotlight for their high prices ever since the government directed the Australian Competition and Consumer Commission to conduct an inquiry into the supermarket sector.Here's why Coles and Woolworths have such a hold on Australian consumers and why they have no incentive to be price competitive.
But despite these concerns and three Choice shopping cart comparisons, many Australians keep going back to the same supermarket duopoly.shows that within any given month, 76 per cent of shoppers head to either Coles or Woolies for their primary shop.Even when customers do decide to branch out and give competitors a chance, they're unlikely to venture past the two — they move from Coles to Woolies or vice versa.
This typically happens because retailers offer better deals to win new customers, leaving existing ones to miss out on these incentives. The e61 Institute research shows Australian grocery customers "display long-lasting inertia in their choice of supermarket", with many doing most of their shopping at the same store "over long periods of time".Professor Garg says we're almost a closed economy as far as the grocery retail market is concerned, and that leads to Coles and Woolies having "no incentive to be price competitive".
Dr Camilleri believes Coles and Woolworths will continue to be the first-choice grocery retailer for the foreseeable future. That is less than the 30 per cent gap on a basket of groceries identified by Choice in its September-quarter survey.
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