Excellent year for Aldi as Woolworths sheds $1bn in sales

The latest quarterly Supermarket Currency report by Roy Morgan Research shows Australia’s grocery buyers spent A$89.8bn (US$68.5bn) at supermarkets in the last year.

This represents 87% of the overall A$103bn spent on groceries annually in Australia. Every percentage point change in market share is equal to nearly a billion dollars lost or gained.     

The study estimates that Australians spent A$32.6bn at Woolworths over the period—36.3% of all supermarket expenditure nationally. This, however, is down A$825m compared to the previous year, representing a decline in market share of 1.4 percentage points. 

This is the second consecutive year that Woolworths’ sales and market share have has declined since they reached a peak of A$34.4bn in 2014, 40% of that year’s market share. 

It’s a very different story for Coles, where grocery shoppers spent A$1.1bn more than they did in 2015, and which gained 0.9 percentage points in market share with A$29.8bn in revenues.

Woolworths’ loss was not solely Coles’ gain: Aldi claimed 0.5 percentage points in increased market share after a good year. The German discount supermarket hit a new high as its checkout staff took in 12.5% of Australia’s supermarket dollars.  

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

“Price wars between Coles and Woolworths, and the rise of discount chain Aldi, appear to have stalled growth in the overall market​,” said Michele Levine, chief executive of Roy Morgan Research. 

Between 2008 and 2014, the total national spend at supermarkets grew an average 4% annually, adding around A$3bn a year to the tills. 

“Then from 2014 to 2015, supermarket spend grew by only 1.8%, and by only 1.2% from 2015 to now—or only a billion dollars more than last year​,” Levine said. 

“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​.”