Fresh faces: The imminent entry of AmazonFresh will boost already fierce industry competition

The Supermarkets and Grocery Stores industry is one of the most fiercely competitive industries in Australia. The rapid expansion of ALDI over the past five years has significantly altered the industry's operating landscape, with the popularity of its low-cost private-label products underpinning strong growth. The rise of ALDI has forced the two established industry giants, Woolworths and Coles, to cut prices and expand their private-label product ranges in response. Smaller supermarket chains, such as FoodWorks, have struggled to compete in an increasingly price-intense industry. Industry profit margins have fallen over the past five years as players have reduced prices and accepted lower margins to stay more.

Industry Statistics & Market Size
Annual Growth 14-19
Forecast Growth 19-24

Industry Threats & Opportunities

  • Industry operators have reduced prices and accepted lower margins to stay competitive
  • Private-label product ranges have strongly grown as a share of industry revenue
  • Price deflation arising from fierce price competition is anticipated to constrain revenue growth
  • Industry Report - Industry Key Buyers Chapter

    The Supermarkets and Grocery Stores industry is highly concentrated, with the four largest operators accounting for over 80% of industry revenue in 2018-19. The industry is one of the most concentrated industries in Australia, with Coles and Woolworths accounting for over 65% of industry revenue in the current year. The strong growth of ALDI has increased industry concentration over the past five years. ALDI operates as a low-cost player that stocks a limited range of popular grocery items. Consumers have responded positively to this model, contributing to ALDI's rapid growth over the past five years...purchase to read more.

    Additional Insights for the Supermarkets and Grocery Stores Industry

    IBISWorld has determined the most important Key Success Factors for the Supermarkets and Grocery Stores are:

  • Ability to control stock on hand
  • Attractive product presentation
  • Experienced work force
  • IBISWorld analysts also discuss how external factors such as Real household disposable income and Consumer sentiment index in the Supermarkets and Grocery Stores industry impact industry performance..

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    What's in this report

    What is the Supermarkets and Grocery Stores Industry?

    Supermarkets and grocery stores retail a range of groceries and food products, including fruit and vegetables, bread, cigarettes, canned goods, toiletries, dairy goods, delicatessen items and cleaning goods. Specialist retailers, niche retailers and convenience stores are excluded from the industry.

    Industry Products
  • Dry and packaged foods
  • Bread and bakery products
  • Meat products
  • Milk and other dairy products
  • Fresh fruit and vegetables
  • Beverages
  • Tobacco products
  • Toiletries, health products and general merchandise
  • Industry Activities
  • Operating supermarkets
  • Operating grocery stores
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Real household disposable income
  • Consumer sentiment index
  • Population
  • Demand from cafes, restaurants and takeaway food services

  • Current Performance
  • Industry landscape
  • Private-label products
  • Store operations
  • Chart: Revenue Growth

  • Industry Outlook
  • Online focus
  • Competition
  • Investing in technology
  • Table: Supermarkets and Grocery Stores Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Supermarkets and Grocery Stores Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Consumers

  • Key Selling Industries
  • Cosmetics and Toiletry Wholesaling
  • Dairy Produce Wholesaling
  • Fruit and Vegetable Wholesaling
  • General Line Grocery Wholesaling
  • Meat Processing
  • Outdoor Vegetable Growing
  • Soft Drink and Pre-Packaged Food Wholesaling

  • Products & Services
  • Dry and packaged foods
  • Fresh fruit and vegetables
  • Toiletries, health products and general merchandise
  • Meat products
  • Bread and bakery products
  • Milk and other dairy products
  • Tobacco products
  • Beverages
  • Chart: Supermarkets and Grocery Stores Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Fifth income quintile
  • Fourth income quintile
  • Third income quintile
  • Second income quintile
  • First income quintile
  • Chart: Major Market Segmentation for the Supermarkets and Grocery Stores Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Supermarkets and Grocery Stores

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Supermarkets and Grocery Stores Industry

  • Industry Globalization
    Woolworths Group Limited, Wesfarmers Limited, ALDI Stores Supermarkets Pty Ltd, Metcash Limited,
  • Table: Woolworths Group Limited - financial performance
  • Table: Wesfarmers Limited - financial performance
  • Table: ALDI Stores Supermarkets Pty Ltd - financial performance
  • Table: Metcash Limited - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Supermarkets and Grocery Stores Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Supermarkets and Grocery Stores Industry
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Wages (2010-2024)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
  • Smartphone or tablet application program.
  • Dark Store
  • A large retail facility that resembles a conventional supermarket that is not open to the public and is used for storing goods used to fulfil orders placed online.
  • Private-Label
  • Products that are branded under the store they are sold in. These products are produced for supermarkets under contract and earn higher profit margins.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Supermarkets and Grocery Stores market research report is a comprehensive guide to market size and growth prospects. Our industry reports offer strategic industry analysis of the factors influencing companies, including new product developments, economic, lifestyle and demographic influences, distribution and supply chain factors and pricing issues. Full analysis accompanies our data forecasts to illustrate how the market responds to emerging industry trends.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Supermarkets and Grocery Stores:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Supermarkets and Grocery Stores market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Supermarkets and Grocery Stores, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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