Australia Grocery Market Size, Share, Growth Analysis Report and Forecast Trends 2024-2032

Australia Grocery Market Trends

The Australia grocery market is experiencing growth, distinguished by its high-quality, fresh produce, with stringent agricultural standards ensuring safety. There is an increasing emphasis on sustainability, including eco-friendly packaging and sourcing practices. The market offers a wide variety of products, from organic options to international brands, ensuring the freshness of perishables like fruits and vegetables. In March 2024, Aldi announced plans to enter the online grocery market in Australia by late 2024, responding to the growing demand for convenient shopping. This move is expected to intensify competition among major retailers in the e-commerce sector.

The growth of the Australia grocery market is driven by the fact that a large proportion of grocery products are sourced locally, which supports farmers and helps reduce the environmental impact. The market benefits from a strong retail network, including supermarkets and online platforms, providing competitive pricing and promotions. Technological innovations, such as self-checkouts and e-commerce, enhance customer convenience. The demand for health-conscious products is also rising. In August 2023, the Gander app launched in Australia, helping consumers save money while reducing food waste by connecting them with discounted products approaching their expiration dates, promoting both sustainability and budget-friendly shopping.

Australia Grocery Market Growth

Opportunities in the Australia grocery market are driven by a wide selection of food products that cater to various dietary needs. Innovation plays a key role, with new flavours, ingredients, and convenience solutions emerging. Online grocery shopping is expanding, supported by a reliable supply chain that ensures fresh product delivery. Strict government regulations also enhance food safety and ethical standards. In December 2023, the SmartCart app launched a new feature that compares prices between Coles and Woolworths, helping users find the best deals, with shoppers saving an average of AUD 30 per purchase using this tool.

The Australia grocery market revenue is impacted by the wide range of ethnic foods reflecting the country’s multicultural society. Increased competition between retailers results in better deals for consumers, while global trade introduces a variety of exotic products. Growing support for local farmers and evolving consumer trends, such as the rise of plant-based foods, continue to shape the market’s future. In February 2024, Shopfully introduced a feature that aggregates grocery promotions from various Australian retailers, helping users find discounts and special offers both online and in-store.

Australia Grocery Market Insights

• Retail sales in New South Wales totalled AUD 115 billion in 2023, with grocery sales playing a major role as consumers prioritised food and essential items, according to the ABS Retail Trade Report, 2023.
• The Australian Bureau of Statistics (ABS) highlighted that in the 2020-21 period, the e-commerce retail sector contributed 41.5% to the growth in the value added by digital activities in Australia.
• Industry reports show that Australia's disposable personal income stood at AUD 395,857 million, with the "Real Net National Disposable Income" per capita recorded at USD 71,479 for the 2021-22 financial year.
• The grocery market in the Western Australia is expected to grow at a rate of 16.3% from 2024 to 2032.

Industry News

April 2024

Woolworths revealed improvements to its online grocery shopping platform, featuring better navigation and personalized recommendations. These updates are designed to enhance the shopping experience and meet the increasing demand for convenience from Australian consumers.

January 2024

Frugl introduced a new and improved price comparison feature, enabling users to compare grocery prices across leading retailers such as Coles and Woolworths. This enhancement aims to help consumers reduce their grocery costs by showcasing the best available deals.

Australia Grocery Market Drivers

Growth of Online Grocery Shopping

Online grocery shopping is reshaping the Australia grocery market dynamics and trends, experiencing notable growth due to rising consumer demand for convenience and the widespread adoption of technology. E-commerce platforms enable consumers to shop from home, benefiting from delivery or click-and-collect options. The pandemic accelerated this trend, and it continues as major grocery chains invest in robust online services. Innovations in logistics, delivery efficiency, and customer service are further enhancing the shopping experience. In February 2024, Coles launched a same-day delivery service for online orders, allowing customers to receive groceries within hours of purchase, reflecting the growing demand for convenience in grocery shopping.

Demand for Health-Conscious Products

The Australia grocery market is witnessing an increased focus on health and wellness, with consumers prioritising organic, gluten-free, plant-based, and low-sugar products. Rising health awareness and changing eating habits are driving this shift, with supermarkets expanding their offerings to meet the demand for fresh, minimally processed foods. Consumers are willing to pay more for products that align with their health goals, which has become a key focus for Australian retailers. In November 2023, Woolworths reported a 20% increase in sales of health-conscious products, including organic and gluten-free items, reflecting a clear shift towards healthier eating preferences.

Opportunities in the Australia Grocery Market

Sustainability is a key trend in the Australia grocery market, with both consumers and retailers becoming increasingly aware of their environmental impact. There is growing demand for sustainably sourced products, such as organic produce, eco-friendly packaging, and ethically produced goods. Australian consumers are placing more importance on reducing food waste and supporting businesses that prioritise environmentally responsible practices. In response, grocery retailers are adopting sustainable supply chain practices and expanding their product ranges to meet ethical and environmental standards, in line with consumer expectations for transparency and accountability. A March 2024 study by CSIRO revealed that over 70% of Australian food producers are implementing sustainable practices to meet the demand for ethically sourced products, marking a significant shift towards sustainability in the sector.

Market Restraints

The Australia grocery market faces several key challenges. Supply chain disruptions, including global shipping delays, labour shortages, and extreme weather, can lead to stock shortages and increased costs. Rising inflation and living costs place pressure on consumers, particularly lower-income households, forcing them to reduce spending or opt for cheaper products.

Intense competition between major players, like Woolworths and Coles, leads to price wars and erodes profit margins, while market saturation limits growth opportunities. Rapidly changing consumer preferences, such as the shift towards organic and plant-based products, require retailers to adapt. Additionally, growing regulatory and environmental pressures, including stricter food safety and sustainability standards, increase operational costs and affect profitability.

Australia Grocery Industry Segmentation

“Australia Grocery Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Market Breakup by Product Type

• Breakfast and Cereal
• Household and Cleaning Products
• Beauty and Personal Care
• Baby Food and Care
• Pet Food and Care
• Fresh Produce
• Snacks and Beverages
• Staple and Cooking Essentials
• Others

Market Breakup by Distribution Channel

• Hypermarkets/Supermarkets
• Convenience Stores
• Online Channels
• Others

Market Breakup by Region

• New South Wales
• Victoria
• Queensland
• Australian Capital Territory
• Western Australia
• Others

Australia Grocery Market Share

Market Analysis by Product Type

According to the Australia grocery market analysis, the sector is driven by household and cleaning products, which are crucial for maintaining hygiene and a healthy living environment. These products help eliminate dirt, allergens, and bacteria, promoting overall well-being. The increasing demand for eco-friendly options also supports sustainability and reduces exposure to harmful chemicals, appealing to health-conscious consumers. In October 2023, Wash Wild launched a new range of household cleaning products made with over 99% plant-derived ingredients. This line includes laundry liquid, multipurpose spray, and grocery, emphasising safety and environmental sustainability.

The demand for the Australia grocery market is further strengthened by the beauty and personal care sector, which boosts self-esteem and personal hygiene while offering a wide range of products suited to individual needs. The growing preference for natural ingredients encourages healthier choices and aligns with sustainability and ethical sourcing trends in personal care routines. In February 2024, Sundaze Skincare introduced a new collection of eco-friendly body creams made from natural ingredients. The products are packaged in recyclable materials, catering to consumers who prioritise sustainability in their beauty routines.

Market Analysis by Distribution Channel

According to the Australia grocery market report, convenience stores dominate by offering quick access to essential grocery items, ideal for busy lifestyles and last-minute shopping. Their extended hours and prime locations enhance consumer convenience, making them a popular choice among urban dwellers seeking an efficient shopping experience. In January 2024, 7-Eleven launched a new healthy snack range, including protein bars and organic chips, available in-store. This initiative targets health-conscious consumers looking for convenient snack options while on the go.

The growth of the Australia grocery market is driven by online shopping, which offers unmatched convenience, allowing consumers to shop from home at any time. This segment is expected to grow at a CAGR of 12.1% from 2024 to 2032. The ability to compare prices, access a broader product range, and enjoy home delivery improves the shopping experience for busy consumers. In April 2024, Woolworths introduced an exclusive online range of organic products, such as fresh produce and pantry essentials. This launch caters to health-conscious shoppers seeking convenient access to organic groceries from home.

Australia Grocery Market Regional Insights

New South Wales Grocery Market Overview

According to the Australia grocery industry analysis, the grocery market in New South Wales is experiencing a shift towards boutique stores, reflecting consumers' growing preference for convenience and quality. Major retailers are responding by offering personalised products and enhancing the shopping experience to cater to urban residents. In 2023, the average disposable income in New South Wales was around AUD 1,800 per week, supporting consumer spending on groceries and personal care items, according to the Australian Bureau of Statistics, 2023.

Queensland Grocery Market Trends

The Queensland grocery market is seeing increased competition among retailers, driven by consumer demand for fresh, locally sourced products. The rise of e-commerce and delivery services is changing how consumers purchase groceries. In 2023, retail sales in Queensland reached AUD 90 billion, with groceries making up a substantial portion, as consumers focus on essential purchases amid economic challenges, according to the ABS Retail Trade Report, 2023.

Western Australia Grocery Market Dynamics

Western Australia's grocery market is evolving with an emphasis on sustainability and local sourcing. Consumers are prioritising organic and environmentally friendly products while increasingly turning to online shopping for convenience. This segment is expected to grow at a CAGR of 5.8% from 2024 to 2032. The average disposable income in Western Australia was around AUD 1,750 per week in 2023, enabling residents to invest in higher-quality and speciality grocery items, according to the ABS Regional Statistics, 2023.

Competitive Landscape

The Australia grocery market key players benefit consumers by promoting competitive pricing, providing a wide range of products, and improving accessibility. Innovations such as self-checkout systems, mobile apps, and online shopping enhance convenience. Additionally, these players prioritise sustainability, local sourcing, and customer-focused services, fostering environmental responsibility and catering to varied consumer demands.

Key Industry Players

Nestlé SA: Headquartered in Vevey, Switzerland, Nestlé SA was established in 1867. It is the world’s largest food and beverage company, offering products across nutrition, health, and wellness. Nestlé’s portfolio includes popular brands like Nescafé, KitKat, and Maggi, operating in over 190 countries globally.

The Coca-Cola Company: Founded in 1892 and headquartered in Atlanta, Georgia, The Coca-Cola Company is a leading global beverage corporation. Known for its iconic Coca-Cola soda, the company’s portfolio includes soft drinks, juices, and bottled water. Coca-Cola operates in over 200 countries, focusing on refreshing consumers worldwide.

Unilever plc: Established in 1929 and headquartered in London, United Kingdom, the company is a global leader in consumer goods, offering products in categories such as food, beverages, personal care, and home care. Well-known brands include Dove, Lipton, and Ben & Jerry’s, operating in over 190 countries.

Procter & Gamble Company: Founded in 1837 and based in Cincinnati, Ohio, Procter & Gamble (P&G) is a multinational corporation specialising in household and personal care products. P&G’s brands include Tide, Pampers, and Gillette. With a strong presence in over 180 countries, it is known for innovation and product quality.

Other key players in the Australia grocery market report are Mondelez International, Inc., Mars, Incorporated, The Kraft Heinz Company, Danone SA, Kellogg’s, Inc. and General Mills, Inc., among others.

Recent Developments

March 2024

The Grocereaze app experienced a significant rise in downloads as more Australians look for ways to cut grocery costs amid increasing prices. The app allows users to track prices and discover deals across leading supermarkets like Coles and Woolworths.

September 2023

Woolworths pledged to source 100% of its fresh produce from sustainable farms by 2030. This commitment supports ethical practices, environmental responsibility, and sustainable farming techniques, aligning with consumer demand for eco-friendly products and enhancing Woolworths’ sustainability efforts.