Australia Grocery Market Size, Share, Growth Analysis Report and Forecast Trends 2025-2034

Australia Grocery Market Overview

The Australia grocery market is demonstrating consistent upward momentum, primarily propelled by robust need for locally sourced, high-quality fresh produce that aligns with stringent agricultural safety standards. This domestic sourcing model not only supports rural economies but also contributes to a lower environmental footprint, resonating with consumers' growing preference for sustainable consumption. expansion is further supported by product diversification across organic and international categories, especially in perishables, where freshness and traceability are vital.

Sustainability is emerging as a key trend in the Australia grocery market, with accelerated industry adoption of eco-friendly packaging and responsible sourcing practices across grocery product lines. This shift aligns with evolving consumer expectations and contributes to stronger brand positioning and customer retention. Additionally, regulatory momentum, such as the mandatory Food and Grocery Code of Conduct effective from 1 April 2025, enhances ethical supplier relations and sector transparency. Enforced by the ACCC and supported by anonymous reporting, this framework promotes accountability and governance, reinforcing confidence in major grocery retailers across physical and digital channels.

Australia Grocery Market Growth

Opportunities in the Australia grocery market was propelled by the availability of diverse food products tailored to a broad spectrum of dietary requirements, including gluten-free, vegan, and low-sodium options. Innovation continued to be a core expansion enabler, with the introduction of new flavours, ingredients, and convenience-focused offerings. In March 2024, the launch of the UpUp app, initially a personal spreadsheet, evolved into an AI-driven solution, empowering consumers to identify cost savings between major retailers Coles and Woolworths. This reflected broader cost-of-living concerns. Simultaneously, online grocery channels expanded, underpinned by reliable logistics and stringent food safety regulations.

The Australia grocery market revenue is impacted by the rising popularity of ethnic and multicultural food options, which aligns with the country’s diverse demographic landscape. Heightened competition among leading grocery retailers fostered more competitive pricing strategies, while global imports introduced unique and exotic products to local shelves.

Key Trends and Developments

The Australia grocery market is experiencing expansion propelled by the rise of private label products, increased e-commerce and omnichannel integration, a strong consumer focus on health and wellness, and growing need for sustainability and ethical sourcing across all product categories.

April 2025

Aldi Australia launched a new website and app to meet shifting customer behaviour, offering more transparent grocery pricing and planning tools. This digital rebrand was well received by shoppers seeking convenience and savings. Coles and Woolworths also reported expansion in online engagement, highlighting a sector-wide shift towards digital grocery planning and purchasing.

April 2025

Coles launched a three-month free delivery promotion to attract online shoppers, offering benefits through its Coles Plus and Coles Plus Saver programs. This move followed a 25.7% rise in online sales. Subscribers also gained free Click & Collect, discounts, and double Flybuys points, reflecting Coles’ strategy to drive digital engagement and customer loyalty.

February 2025

MLex introduced a new platform, advising existing customers to continue using the current version until migration is complete. The platform offers in-depth news, case files, and analysis on regulatory changes across sectors like antitrust, M&A, data privacy, and more. It offers daily newsletters, custom alerts, and predictive insights.

September 2024

Alibaba’s Freshippo launched its first Australian presence in partnership with Ebest, a local Asian supermarket. The collaboration made a tailored selection of Chinese groceries available via Ebest’s app and website. This expansion follows Freshippo’s entry into the US and Singapore markets.

Rise of Private Label Products is Impacting the Australia Grocery Industry Revenue 

Private label penetration continues to expand, propelled by cost-conscious consumers and improved quality perceptions. Major retailers are leveraging private brands to enhance margins and customer loyalty. This shift challenges traditional FMCG brands to innovate and differentiate, particularly as consumers prioritise value without compromising on quality. Retailers are investing in premium-tier private label to capture a greater sector share.

E-Commerce and Omnichannel Integration are Boosting the Demand of the Australia Grocery Market 

Digital transformation is accelerating, with online grocery sales projected to grow significantly. Consumer need for convenience has driven the adoption of click-and-collect and home delivery services. Retailers are integrating physical and digital channels to enhance customer experience, while also leveraging data analytics for personalised marketing, inventory optimisation, and supply chain efficiencies.

Health and Wellness Focus is Driving Growth of the Australia Grocery Market 

Shifts in consumer preferences toward healthier and functional foods are reshaping product portfolios. Natural, organic, and low-sugar offerings are gaining traction, underpinned by growing health consciousness and regulatory support for transparent labelling. Retailers are responding with curated health-focused ranges, which present expansion prospects for brands aligned with wellness, sustainability, and clean-label trends.

Sustainability and Ethical Sourcing are Influencing the Australia Grocery Market Dynamics and Trends 

Environmental and social governance (ESG) considerations are influencing purchasing decisions. need for eco-friendly packaging, ethical sourcing, and carbon footprint reduction is rising. Retailers are increasingly adopting sustainability frameworks to align with consumer expectations and regulatory pressures. This trend is a key differentiation point, offering long-term brand equity and competitive advantage for early adopters.

Australia Grocery Market Trends

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 need 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 August 2023, Woolworths launched an AUD 35 trolley divider in partnership with Healthylife to promote healthier food choices. Supported by data from 900 million transactions, it integrated with the Everyday Rewards app to guide balanced grocery shopping during inflation.

Opportunities in the Australia Grocery Market

Sustainability has become a pivotal trend in the Australia grocery market, propelled by both consumer need and retailer initiatives. Consumers are increasingly prioritising sustainably sourced products, such as organic produce, eco-friendly packaging, and ethically produced goods, reflecting a heightened awareness of environmental effect. In response, retailers are adopting sustainable supply chain practices and expanding product ranges to meet ethical and environmental standards. According to CSIRO’s 2023 Food Systems Roadmap, 27 strategic prospects have been identified to enhance the sustainability, productivity, and resilience of Australia's food systems, with input from over 120 stakeholders.

Market Restraints

The Australia grocery market faces multiple operational and strategic challenges impacting expansion and profitability. Ongoing supply chain disruptions, from global shipping delays to labour shortages and adverse weather, have contributed to stock instability and rising operational costs. Heightened inflation and cost-of-living pressures are reshaping consumer spending patterns, particularly among lower-income households.

Meanwhile, intense competition between dominant players such as Woolworths and Coles continues to compress margins. Simultaneously, evolving consumer preferences and tightening regulatory frameworks around sustainability and food safety need continual adaptation, placing further strain on profitability and operational efficiency.

Australia Grocery Market Share

Market Analysis by Product Type

According to the Australia grocery market report, the household and cleaning products sector is propelled by an growing need for eco-friendly solutions, crucial for maintaining hygiene and a healthy living environment. Products like Wash Wild’s new range, launched in February 2024, featured over 99% plant-derived ingredients, including laundry liquids and multipurpose sprays. This shift reflected a broader consumer interest in sustainability and health-conscious products that reduce exposure to harmful chemicals, aligning with growing concerns about environmental effect and safety in everyday household items.

The beauty and personal care sector is gaining momentum, with consumers prioritising self-esteem and hygiene through personalised product ranges, impacting the Australia grocery industry revenue. The shift towards natural ingredients grew, propelled by a desire for healthier and more ethical choices. In October 2024, Sundaze Skincare introduced a new eco-friendly body cream collection, made from natural ingredients and packaged in recyclable materials. This move reflected broader sector trends towards sustainability, as consumers increasingly favoured brands that aligned with ethical sourcing and environmental responsibility in their personal care routines.

Market Analysis by Distribution Channel

According to the Australia grocery market report, convenience stores are key players, catering to the needs of time-strapped consumers with easy access to essential grocery items. Their strategic locations and extended hours align with the need for swift, last-minute shopping, particularly in urban areas. This model’s popularity is further amplified by the ongoing shift towards fast-paced lifestyles, with consumers favouring efficiency. Coles Supermarkets became the first retailer in the APAC region to introduce Instacart’s AI-powered Caper Carts in February 2024. These smart trolleys, equipped with AI, cameras, and built-in scales, enabled customers to track spending, bag items, and access personalised offers through the Flybuys program.

Online grocery shopping is shaping the Australia grocery market dynamics and trends, with convenience and flexibility becoming top priorities for consumers. Online platforms offer consumers the advantage of shopping from home, with a wider product selection and the ability to easily compare prices.

Australia Grocery Market Regional Insights

New South Wales Grocery Market Overview

The grocery sector in New South Wales is experiencing a shift towards boutique stores, reflecting consumers' growing preference for convenience and quality. 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 sector is seeing increased competition among retailers, propelled by consumer need 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 sector 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. 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.

Victoria Grocery Market Drivers

Victoria’s grocery sector benefits from high urban density and multicultural demographics, driving strong need for diverse product ranges and premium offerings. Consumer preferences skew towards health-conscious and sustainable products. Advanced retail infrastructure and competitive store networks contribute to efficiency and price competitiveness, making it a prime sector for innovation and digital grocery solutions.

Australian Capital Territory Grocery Market Prospects

The ACT's grocery sector benefits from high household incomes and a well-educated population, leading to above-average expenditure on premium, organic, and health-focused grocery items. Digital adoption is high, supporting e-commerce expansion. Policy influence and sustainability awareness also drive consumer preferences, creating prospects for ethical sourcing and environmentally responsible retail practices.

Competitive Landscape

The Australia grocery market key players create value for consumers by fostering competitive pricing strategies, offering diverse product ranges, and enhancing accessibility. Technological innovations such as self-checkout systems, mobile applications, and e-commerce platforms play a crucial role in improving shopping convenience. Furthermore, these players increasingly focus on sustainability, emphasising local sourcing and delivering customer-centric services to meet evolving consumer needs while aligning with environmental goals.

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.