‘Broad concerns’: ACCC hands down interim report on supermarket inquiry
The Australian Competition and Consumer Commission (ACCC) has handed down its interim report for its inquiry into supermarkets, a week after announcing it would take legal action against Coles and Woolworths for misleading pricing claims.
The report outlines what the ACCC has heard from consumers, suppliers, and other interested parties thus far into the 12-month inquiry. The ACCC has said there are “broad concerns” across the board, and it plans to continue investigating these until the final report is due in February 2025.
The interim report comes just a week after the consumer watchdog announced plans to take Coles and Woolworths to Federal Court on separate proceedings for “allegedly breaching the Australian Consumer Law by misleading consumers through discount pricing claims” on hundreds of common products.
“Following many years of marketing campaigns by Woolworths and Coles, Australian consumers have come to understand that the ‘Prices Dropped’ and ‘Down Down’ promotions relate to a sustained reduction in the regular prices of supermarket products,” said ACCC chair, Gina Cass-Gottlieb.
“However, in the case of these products, we allege the new ‘Prices Dropped’ and ‘Down Down’ promotional prices were actually higher than, or the same as, the previous regular price,” she said.
The ACCC interim report has described the supermarket sector as “highly concentrated” and an “oligopoly” where most supply in the market is from a small number of participants. It found that Coles and Woolworths account for 67% of supermarket retail sales nationally, while Aldi accounts for 9% and independent stories (IGA and Village Grocers) account for 7%.
It found that consumers are buying less food, skipping meals, or experiencing emotional distress from grocery shopping. Households earning less than $499 per week, and households earning between $500-$749 per week both reported spending upwards of 20% of their post-tax income on groceries, raising concerns about increasing grocery prices.
Many respondents also raised concerns about promotional practices and how marketing campaigns have misled customers – which will be discussed in the separate proceedings.
While 81% of consumers are members of at least one supermarket loyalty program, and 51% are members of at least two, almost half of the respondents said their membership does not influence their choice of grocery “at all”. Many are hesitant to sign-up to said programs because they don’t want grocery stores to collect their data, as the ACCC has found data collection points via in-store transactions, online stores and mobile apps, as well as video and audio data.
Convenience is instead the most-cited factor in how respondents choose their main supermarket, while those who primarily shop at Aldi said value is the most important factor. However, one-third of the respondents in remote areas said they have no choice in choosing a main supermarket, compared to 6% in regional areas and 1% in metro areas.
Moving forward in the inquiry, the ACCC has said it will focus on how promotions and loyalty programs affect consumer behaviour and purchasing decisions.
The interim report also found that suppliers have concerns about their reliance on major supermarkets, due to a lack of transparency, risks to trading arrangements and price agreements, and concerns that the quality assessment of products is used for purposes other than genuine quality issues.
Despite these widespread concerns, suppliers consistently reported not raising them with the major supermarkets, due to fears of jeopardising their commercial relationships.
The ACCC has said it has “not yet reached conclusions” about any of the questions raised by suppliers, but will continue to explore them ahead of the final report.
The consumer watchdog has said it will undertake a series of case studies across meat products, fresh produce, packaged food items, other animal products, and non-food items, to help analyse the key issues facing suppliers and to examine the prices and margins along the supply chains.
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Lauren McNamara was the associate editor at Mumbrella. She joined in November 2022 as editorial assistant, after completing a Bachelor of Communications (Journalism) at UTS. She left Mumbrella in August 2025.
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topics
ACCC
Australian Competition and Consumer Commission
Coles
inquiry
price gouging
Supermarket
Woolworths
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