As Australians, we're creatures of habit, especially when it comes to where we buy our groceries. It turns out that many of us are sticking to the major supermarkets like Coles and Woolworths, not because of the prices, but because of our shopping habits. This loyalty is not necessarily driven by the best deals or the lowest prices, but rather by a sense of familiarity and convenience that keeps us coming back to the same place week after week.

Recent research by the think tank e61 has shed light on this phenomenon, revealing that a significant number of Aussie shoppers show a strong brand loyalty to one major grocery store over others. This preference is so strong that it's shaping the market, giving these supermarkets more power and reducing competition. The study analyzed consumer bank transactions and found that in NSW and the Australian Capital Territory, there's a high degree of 'inertia' favoring industry giants Coles and Woolworths.

Economist Matt Ellias, the author of the report, suggests that this customer behavior persists even in areas serviced by a variety of grocery stores. The lack of shopping around isn't due to a scarcity of options but rather factors like convenience, unconscious habit, and a lack of resources to help shoppers find the best deal. Coles and Woolworths also have a competitive edge by strategically locating their stores in prime areas, often within shopping centers, which offer additional amenities and convenient parking.

A report found shoppers tended to stick to one supermarket brand when grocery shopping. Credit: Shutterstock

The research indicates that brand loyalties run deep, with 70% of customers who do their primary large shop at Woolworths likely to return a month later, and 62% still shopping there six months later. Coles sees similar loyalty, with 62% of customers returning after a month and 55% after six months. In contrast, Aldi's numbers are lower, with 48% of customers returning after a month and 37% after six months.

Interestingly, Aldi's strategy of situating stores close to the major supermarkets seems to be a tactical move, making it easier for customers to switch without much hassle. Despite this, the pull of habit keeps many shoppers loyal to their usual supermarket.

This topic of supermarket loyalty and pricing has come under scrutiny recently, with the Australian Competition & Consumer Commission (ACCC) taking legal action against Coles and Woolworths over allegations of misleading discount practices. Furthermore, a CHOICE survey found that while Aldi offered the cheapest prices for a 14-item basket of groceries, the price difference between Coles and Woolworths was minimal, and all were significantly cheaper than IGA.

The ACCC's interim report on the supermarket sector also highlighted the difficulties shoppers face in comparing prices, contributing to a loss of trust in supermarket pricing claims. These challenges are reportedly due to various pricing practices, such as frequent specials, short-term lowered prices, bulk-buy promotions, member-only prices, and bundled prices.

So, what does this mean for you, our savvy seniors? It's a reminder to consider whether your shopping habits are serving you well. Are you visiting the same supermarket out of convenience or habit, or are you actively seeking the best deals to stretch your dollar further? It's worth taking a moment to reflect on your shopping routines and whether a change might be beneficial.

Key Takeaways

• Australian shoppers often display brand loyalty to one major grocery store rather than shopping around for better prices, which strengthens the market share of large supermarkets like Coles and Woolworths.
• According to research from the think tank e61, this consumer 'inertia' results in less competition and gives major supermarkets significant market power, as customers tend not to seek out potential better options at alternative stores.
• The research found that a large number of customers remain loyal to their primary supermarket, with 70% of Woolworths' customers and 62% of Coles' customers returning for their main shopping one month later.
• The Australian Competition & Consumer Commission (ACCC) is taking legal action against Coles and Woolworths over allegations of misleading discount practices, highlighting issues with supermarket pricing transparency and dwindling consumer trust in sale price claims.

We'd love to hear from you, our Seniors Discount Club members. Are you loyal to one supermarket, or do you shop around for the best prices? Have you found that your shopping habits have changed over time, or do you stick to what's familiar? Share your experiences and tips in the comments below – your insights could help fellow members make more informed choices about where they shop.

 

[gbaerken]

The scary thing I take away from this story is this statement "The study analyzed consumer bank transactions" who is giving this group access to peoples accounts. Sure they may only be getting certain details, but the fact that banks are managing to extract money using our accounts pisses me off even more at the them. They keep taking but never give.

 

[Colette 3799]

My preference is usually Coles. I know I can buy everything I need in one place and I get quality goods. My friends who shop at Aldi always say they have to go elsewhere as well to complete their shop. I really couldn’t be bothered plus Aldi products are inferior. It’s like shopping home brands in Cols or Woolies.

 

[Judio]

Inferior products only at Aldi, never at the 'big 2'! The majority of Aldi brands are actually 'named' brands that do a special run and have Aldi labels attached. It seems you don't need to watch your $'s.

 

[Beany]

I look for the specials, I usually go to coles but if Woolies has things on special that i need I go there, conveniently for me, the street that has Coles on also has Woolies and also the chemist we go to all the time so I am not going out of my way to go to either or both stores. In the big complexes like colonnades Noarlunga in South Australia, Woolies is down one end and Coles is the other end so more convenient to go down the street that has easy access to both. I also don't like Aldi, although my husband likes to go there for the dog meat which is the same brand as Coles and Woolies except cheaper but again only if we are going to Colonnades.

 

[GrannyJA!]

I have no loyalty to any of the supermarkets. What I do is sit down with all the catalogues, on the phone, when they come out. The half price specials are first, unfortunately they consist of mainly junk food and non-essentials. Anything that I use I add to my shopping list. If something has a long shelf life, then I buy more. Move on to the other specials and do the same. The good thing about being old is that I have the time to compare, the supermarkets are only minutes apart and I also watch the regular price of what I buy, so as to not be sucked in by 'false specials' and other mark-up/mark-down tactics. My kids tell me that they don't have the time, energy or money to do what I do. Admittedly you do need $ in your pocket to stock up on specials, and having lived 'pay day to pay day' I do know what they mean.

 

[freedy50]

I can easily get to 7 Woolworths, 5 Aldi's and 2 Coles, so obviously go to Woolies all the time and also Aldi. They've both got everything I need. Sometimes also go to an independent fruit and veg place.

 

[mylittletibbies]

My preference is usually Coles. I know I can buy everything I need in one place and I get quality goods. My friends who shop at Aldi always say they have to go elsewhere as well to complete their shop. I really couldn’t be bothered plus Aldi products are inferior. It’s like shopping home brands in Cols or Woolies.

I shop wherever I get the best price, first obviously Aldi, followed by Coles and Wooleorths.
Your statement that Aldi products are inferior is just your opinion and not backed by fact, as Choice have often found Aldi's products to be superior and better value for money.
Yes, I do have to go to Coles or Woolies for some products that Aldi don't have but the little extra time that takes is well worth the savings and that is more important to me.
I was raised on the old saying "take care of the pennies and the pounds will take care of themselves" and it has served me well and bought me to the place where I have a comfortable retirement.
Old habits die hard though and although I don't have to I still look for a bargain and don't pay more than I have to.
Your comment that you couldn't be bothered to shop around I guess proves what this article states, basically that people's habits and sometimes inertia keep them loyal to the big two supermarkets despite their price gouging.
Still people are entitled to shop where they please but I can never understand some of my friends who continually keep complaining about Coles and Woolies prices but still go there, despite having better options????

 

[Beany]

I have no loyalty to any of the supermarkets. What I do is sit down with all the catalogues, on the phone, when they come out. The half price specials are first, unfortunately they consist of mainly junk food and non-essentials. Anything that I use I add to my shopping list. If something has a long shelf life, then I buy more. Move on to the other specials and do the same. The good thing about being old is that I have the time to compare, the supermarkets are only minutes apart and I also watch the regular price of what I buy, so as to not be sucked in by 'false specials' and other mark-up/mark-down tactics. My kids tell me that they don't have the time, energy or money to do what I do. Admittedly you do need $ in your pocket to stock up on specials, and having lived 'pay day to pay day' I do know what they mean.

My mum used to stock up on different items, but she also stocked up on toilet paper and tissues, guess that is where I get it from, also cleaning products and I also stock up on cat food too. I have always gone by the saying look after the pennies and the pounds will look after themselves. An old saying but so true. Sadly younger people think that it isn't worth their time to check out specials and stock up but even if you saw for instance peas and carrots in a tin on special and brought two instead of one that is a start to having more in your cupboards so when money is even tighter at least you have food in your cupboards so you can still eat.

 

[steveswr53]

Aldi really is a con. They are cheaper on some things but the issue is the ridiculous cross comparison that are shown regularly in newspapers and Choice...comparing Aldi home brands to major brands from Woolworths and Coles. My own finding is that Coles have the best specials overall. Buy things when on special. Certain things fall in the "you are nuts if you buy them at full price". Coffee, cereal, drinks, petfood and on special every week somewhere and if you have your wits about you you'd never pay full price. I wonder if anyone has ever bought a full price packet of Arnott''s Shapes biscuits/

 

[GrannyJA!]

My mum used to stock up on different items, but she also stocked up on toilet paper and tissues, guess that is where I get it from, also cleaning products and I also stock up on cat food too. I have always gone by the saying look after the pennies and the pounds will look after themselves. An old saying but so true. Sadly younger people think that it isn't worth their time to check out specials and stock up but even if you saw for instance peas and carrots in a tin on special and brought two instead of one that is a start to having more in your cupboards so when money is even tighter at least you have food in your cupboards so you can still eat.

I get you, but being time-poor is also a contributing factor for the youngsters I was referring to. Including shift working parents etc.

 

[Colette 3799]

I shop wherever I get the best price, first obviously Aldi, followed by Coles and Wooleorths.
Your statement that Aldi products are inferior is just your opinion and not backed by fact, as Choice have often found Aldi's products to be superior and better value for money.
Yes, I do have to go to Coles or Woolies for some products that Aldi don't have but the little extra time that takes is well worth the savings and that is more important to me.
I was raised on the old saying "take care of the pennies and the pounds will take care of themselves" and it has served me well and bought me to the place where I have a comfortable retirement.
Old habits die hard though and although I don't have to I still look for a bargain and don't pay more than I have to.
Your comment that you couldn't be bothered to shop around I guess proves what this article states, basically that people's habits and sometimes inertia keep them loyal to the big two supermarkets despite their price gouging.
Still people are entitled to shop where they please but I can never understand some of my friends who continually keep complaining about Coles and Woolies prices but still go there, despite having better options????

I have tried to buy at Aldi but I’m always disappointed with what I get. I threw out at large box of baking paper, along with the food I used it for, three different dishes stuck on it so bad I could t remove the food. It went straight in the bin and I went to Woolies for Glad bake. The foil is useless too and there are many other things I’ve bought that I’ve just thrown away. False economy as far as I’m concerned. If people are satisfied with what the buy from Aldi then good on them but it’s not for me

 

[GrannyJA!]

Aldi really is a con. They are cheaper on some things but the issue is the ridiculous cross comparison that are shown regularly in newspapers and Choice...comparing Aldi home brands to major brands from Woolworths and Coles. My own finding is that Coles have the best specials overall. Buy things when on special. Certain things fall in the "you are nuts if you buy them at full price". Coffee, cereal, drinks, petfood and on special every week somewhere and if you have your wits about you you'd never pay full price. I wonder if anyone has ever bought a full price packet of Arnott''s Shapes biscuits/

You've got that right. I often joke about never paying full price for anything. It's especially easy with junk food, it's always on special somewhere.

 

[ozieagle]

I shop at Coles, and mostly will. Ditto reasons for Woolies and IGA

Why? Several reasons.
Specials, I buy when on special, maybe several items at once.
They support Aussie clubs etc.
Most of the money stays in Australia, not going overseas, though laterly many foreign products have appeared on the shelves. I always try to buy Aussie ones, support locals.
I suspect that foreign supermarkets do some import / export shenanigans, to avoid tax, and maybe get export credits, making a local product cheaper, than others can buy direct.
Coles has Flybuys, which saves me 4 cents per litre of petrol, plus I get a $10 discount whenever I reach 2000 points, easily done. Many stores, other than Coles, take flybuys, so the points add up quicker.

 

[Clancieblue]

Talking about saving pennies. I just compared my Green slip and saved $80, YES $80. Please check insurance premiums before renewing

 

[GrannyJA!]

I shop at Coles, and mostly will. Ditto reasons for Woolies and IGA

Why? Several reasons.
Specials, I buy when on special, maybe several items at once.
They support Aussie clubs etc.
Most of the money stays in Australia, not going overseas, though laterly many foreign products have appeared on the shelves. I always try to buy Aussie ones, support locals.
I suspect that foreign supermarkets do some import / export shenanigans, to avoid tax, and maybe get export credits, making a local product cheaper, than others can buy direct.
Coles has Flybuys, which saves me 4 cents per litre of petrol, plus I get a $10 discount whenever I reach 2000 points, easily done. Many stores, other than Coles, take flybuys, so the points add up quicker.

If you try Coles own brand products they are often superior to the brand label ones, eg western star spreadable and devondale are double the price and pretty much the same as the Coles spreadable which comes in a larger size. Coles brand double thick cream is the best of them all and all of these products use only Australian dairy products. Coles soft bread is a great deal at $2.80 and comes in all the usual varieties, even making a 5cent charity donation from every loaf sold. Not all own brand products are "no frills".

 

[GrannyJA!]

Talking about saving pennies. I just compared my Green slip and saved $80, YES $80. Please check insurance premiums before renewing

Looks like loyalty doesn't pay any more.

 

[Clancieblue]

Looks like loyalty doesn't pay any more.

When I told a friend they compared their comprehensive insurance and saved $600 with road service thrown in. Still can't believe it. ( Checked the product disclosure very carefully, and it was incredible)

 

[mylittletibbies]

Looks like loyalty doesn't pay any more.

Certainly not with insurance companies.
I shop around every year and saved nearly $600 this year.

 

[GrannyJA!]

My preference is usually Coles. I know I can buy everything I need in one place and I get quality goods. My friends who shop at Aldi always say they have to go elsewhere as well to complete their shop. I really couldn’t be bothered plus Aldi products are inferior. It’s like shopping home brands in Cols or Woolies.

I've found a lot of Coles own brands to be superior to the brand label products, especially in dairy and bakery.