This final report addresses key issues identified in the Supermarkets Inquiry interim report, and analysed during the second phase of the inquiry. It finds Coles and Woolworths dominate the Australian grocery sector and this is set to continue and presents recommendations to the government.

Key findings

• ALDI, Coles and Woolworths increased their average product margins over the last 5 financial years, particularly for branded goods in household and packaged food categories.
• ALDI, Coles and Woolworths appear among the most profitable supermarket businesses globally.
• Australia’s supermarket industry is highly concentrated with an oligopoly structure, dominated by Coles and Woolworths.
• Some suppliers’ dependence on Coles and Woolworths means they take on extra costs and risk.
• Consumers are comparing prices before shopping more, with increased availability of online price information, however there remain barriers to undertaking comparisons.
• Coles’ and Woolworths’ promotional practices can make it difficult for consumers to assess value for money.
• Grocery prices in remote areas are higher, sometimes significantly so, primarily due to higher costs to serve these areas.

Key recommendations

• Large chains to publish prices online.
• Importance of new merger laws and specific treatment of supermarket acquisitions.
• Food and Grocery Code enhancements.
• Regulation of promotional tickets.
• Review of loyalty programs in 3 years.
• Fair trading bodies to monitor display of prices and complaint information.