Major supermarkets are almost never the cheapest option for essential fruit and vegetables, a Guardian Australia survey of prices at 61 retailers has found. An industry insider says the results are “damning”.
Ten Guardian reporters attended local independent and Asian grocers as well as the supermarket giants across two days in July. The prices of a selection of fruits and vegetables – including apples, bok choy, eggplants, pears, potatoes, sweet potatoes and zucchinis – were recorded in stores across Sydney, Melbourne, Townsville (Queensland) and Kyneton (Victoria).
The results showed independent and Asian grocers were routinely cheaper than Woolworths and Coles, defying the perception they are usually the best place for affordable groceries.
Don Linke, who manages multiple fresh food markets across Melbourne, said the results showed it was a “myth” that Coles and Woolworths were the cheapest options for consumers and labelled it a “damning indictment” of how the supermarket giants have operated during a cost-of-living crisis.
“When they say they’re going to ‘lock prices down’, ‘we’re looking after you’, ‘we’ve got the lowest prices’, it’s sloganeering that is at odds with reality,” he said.
Reporters also checked the Harris Farm “imperfects” range, which were substantially cheaper compared with the major supermarkets.
And while prices at independent and Asian grocers varied widely, with some selling some particular produce cheaper and others at a more expensive price than at the major chains, the giants almost never had the cheapest price surveyed. Stores included in the “major supermarket” category in our survey and analysis were Coles, Woolworths, Aldi and Harris Farm’s regular (not imperfect) produce.
On average, granny smith apples were $1.24 and $1.94 cheaper at Asian grocers and Harris Farm imperfects when compared with the major supermarkets. A bunch of bok choy was 88 cents cheaper at Asian grocers, while eggplants were a whopping $3.64 and $4.88 cheaper than the major chains.
Sweet potatoes were $1.51 cheaper at Asian grocers and $2 cheaper at Harris Farm imperfects, while zucchinis were cheaper by $1.76 a kilo in the imperfects range.
The fact that imperfects are so much cheaper suggests aesthetic standards play a role in high prices. Linke said these standards put “upwards pressure” on prices while causing “shameful” amounts of food waste.
“It forces the suppliers to plant more than what they’re using because you’re never going to get 100% perfect-looking fruit.
“The amount of food that is being wasted because it [doesn’t] look perfect is shameful – it should be a crime to destroy that much food,” he said. “There is just so much being sacrificed for visual aesthetics. It translates into nothing at the end of the day.”
While Coles and Woolworths both offer imperfect produce under their “I’m perfect” and “odd bunch” branding, their imperfect produce was not included in the trial as the range offered was either too limited or only available in bulk. All prices in the survey were taken for loose produce priced per kilo or per bunch to allow a like-for-like comparison between stores.
Ian Jarratt, a spokesperson for the Queensland Consumers Association, said the results of the survey were “not surprising” but that consumers shouldn’t make assumptions about their cheapest options.
“Consumers can’t just sit back and … assume they’re going to be the best price here or the best price there because it doesn’t work like that. The system we have means consumers have got to play their part and be active, to shop around and compare values.
“I think it is valuable having as much competition in the market as possible. We’ve got a very concentrated supermarket industry here – particularly compared [with] most countries,” Jarratt said.
“So the more competitors that are out there in the industry, supported by shoppers, the better it will be for consumers and for efficiency.”
A spokesperson for Coles said the supermarket giant had a range of specials every week, and were always “exploring ways to reduce prices”.
“We also continue to receive cost price increase requests from some of our suppliers related to inflation, particularly related to packaged goods, wages and energy,” the spokesperson said.
“Growers have also seen the costs of farming rising including fertiliser, pickers and transport, which has resulted in some cost price increase requests.”
A spokesperson for Woolworths said: “As a national supermarket, we set rigorous standards for our suppliers, including labour welfare and food safety.
“Our retail prices for fruit and veg are influenced by the prices we pay our growers, and we work hard to balance competitive value for customers and fair prices for farmers.”
Earlier this year a Guardian Australia analysis of the financial accounts of Coles and Woolworths over a five-year period showed persistently increased margins on food throughout the pandemic and the current cost-of-living crisis.
Gross margins at Coles’ supermarket division increased from 24.7% shortly before the pandemic to 26.5%, while margins at Woolworths’ Australian food division increased from 29.1% to 30.7%.
When combined, the two chains control two-thirds of the supermarket sector across the country, with Aldi covering just over 10%.
The former head of the Australian Competition and Consumer Commission, Rod Sims, told Guardian Australia in May the major supermarkets had likely used their market dominance to push prices higher than necessary.
Notes on the survey
Fruit and vegetable prices at 61 supermarkets and grocery stores were surveyed over two days across Sydney, Melbourne, Townsville, and Kyneton.
Items surveyed were: apple (granny smith), apple (pink lady), bok choy, eggplant (round), pear (packham), potato (white, washed), sweet potato (orange), and zucchini.
Items were chosen based on a pilot survey of five major supermarkets and four independent and Asian grocers, and were selected as they were available across most supermarkets, Harris Farm imperfect section and independent grocers.
Prices were always for per kilo pricing where available, and price per bunch for bok choy where possible.
Stores were classified into the following categories:
Major supermarket (Coles, Woolworths, Aldi, Harris Farm’s regular produce)
Independent (this includes small chains, IGAs, and any store not in the major supermarket category or Harris Farm imperfects)
Harris Farm imperfects
Asian grocers
For the purposes of the analysis Asian grocers were analysed separately as well as with other independent grocers. The results shown here use Asian grocers as a separate category, with the stores defined as any shop that predominantly sells Asian grocery goods and produce.
Average prices for each item were compared across categories with a one-way Anova, followed by a pairwise Tukey’s HSD.
