Close to half of new shopping centres are being built by Australia's largest supermarket chain, as traditional developers try to sit out eye-watering construction costs.
Woolworths has told a supermarket inquiry the COVID period disrupted the construction market and led the supermarket giant to adopt a more active role, as it had in the wake of the 2008 global financial crisis.
"We're seeing a lot of developers not developing at the moment because it's not commercially viable," Woolworths property boss Ralph Kemmler told the inquiry on Monday.
"On the whole, the market is delivering less than five years ago.
"(Woolworths) is probably not delivering more centres than it did, but as a percentage it's getting back towards 40, 50 per cent."
During more stable economic times, Woolworths was behind about one-quarter of new centres, Mr Kemmler told the Australian Competition and Consumer Commission probe initiated by the federal government.
The $36 billion food giant's land acquisitions are under the commission's microscope, amid allegations of strategic purchases to pressure or lock out competitors.
Mr Kemmler said its portfolio included shopping centres, as well as some in places where the company doesn't operate a supermarket.
But he conceded none of the centres it owned had both a Woolworths and a Coles supermarket.
The inquiry also heard the Woolworths group CEO repeatedly cast Coles as "one of" the chain's major competitors, as Woolworths portrayed itself as being in a wide competition.
Multiple retailers and experts have described Australia's grocery market as concentrated around the big two chains, which operate nearly 2000 supermarkets and control 67 per cent of the market.
Aldi, with its 600 shops, is the next biggest with one-tenth of the market.
Aldi has previously told the commission that overseas grocery markets are more competitive than Australia's duopoly-dominated sector.
But Woolworths CEO Amanda Bardwell said Australia's relatively small population and vast geography meant economies of scale were a key factor.
Her group was operating in a "fiercely competitive" grocery market, pointing to a document listing 44 "competitors"
Retailers include the Cheesecake Shop, Nextra Newsagents and 7-Eleven as well as diet-focused home-delivery meal providers such as Lite n' Easy.
"Some of the retailers ... play a very important role in some key categories" such as Chemist Warehouse in personal care and Bunnings in pet and household care, Ms Bardwell said on Monday.
Meanwhile, Amazon was "absolutely an increasing competitor", leading Woolworths to spend hundreds of millions of dollars to improve its e-commerce capabilities.
The competition commission's interim report found various non-supermarket grocery retailers were not significant competitors.
"(The market) is dominated by Coles and Woolworths, isn't it?" counsel assisting the inquiry Naomi Sharp SC asked.
"We are a substantial part of the market, which is dramatically changing and we compete every single day for customers to choose to shop with us," Ms Bardwell replied.
Woolworths executives will be back before the commission on Tuesday, before their Coles counterparts front the inquiry on Thursday and Friday.
The commission's final report is due in February.
The watchdog is separately taking legal action against the two biggest retailers, accusing them of misleading customers with fake discounts.
