Snapshot of food retailing in Australia
The total value of food and liquor retailing in Australia grew by 4.2 per cent in 2011-12, to $135.8 billion.
The figures come from ‘Australian Food Statistics’, a report produced by the Australian Department of Agriculture, Fisheries and Forestry (DAFF) with data extracted from Australian Bureau of Statistics (ABS). The report also confirms that spending in supermarkets and grocery outlets continued to account for the bulk of food retailing expenditure in 2011-12, with a share of 62 per cent. This percentage share is about the same as spending in supermarket and grocery outlets in 2010-11.
Food retail market share
While supermarkets and grocery stores had a 62 per cent share of food retail sales across Australia in 2011-12, cafes and restaurants had a 14 per cent share, takeaway outlets 11 per cent, liquor retailing 7 per cent, and all other food outlets accounted for only a 6 per cent share.
Major global supermarket chains are increasingly investing internationally, and one of them, Aldi, has done well in the Australian market. The Australian food retail market is still dominated by Australian-based supermarket chains, but others getting a foothold in the Australian market apart from Aldi include SPAR International convenience stores, Seven & I Holdings convenience stores, and Costco.
The major Australian-based supermarket chains, by comparison, have almost no stores in other countries, apart from New Zealand.
Supermarket retail margins
According to the report, retail margins – defined as food and liquor earnings before tax as a proportion of total food and liquor sales – continued to increase for the three major supermarket chains, Coles, Woolworths and the Metcash group, with the latter distributing through the Independent Grocers of Australia (IGA) and the Australian Liquor Markets chain.
These three supermarket chains operated or serviced 3,996 grocery stores and 4,970 liquor outlets throughout Australia in 2011-12. During the same period, Aldi Australia, the fourth major supermarket chain, operated more than 200 stores in New South Wales (NSW), Queensland, Victoria, and the Australian Capital Territory (ACT) in 2011-12.
In 2010-11, the retail margins of Australian-owned supermarket chains were above the calculated average of other major world supermarket chains. According to data gathered by DAFF from the supermarkets’ annual financial reports, the calculated average retail margin of the four major supermarket chains was around 3.1 per cent in 2010-11. Woolworths did especially well, with a retail margin of 7.4 per cent in 2010-11 in its food and liquor division. Coles and Metcash both saw a retail margin of 3.6 per cent in their food and liquor divisions in 2010-11.
World food retail market
According to the report, the world retail market for food is increasingly dominated by large supermarket chains.
Based on financial information gathered from the annual reports of the world’s major supermarket chains, DAFF found that the major Australian-owned supermarket chains – Woolworths, Coles and Metcash – are about medium-sized in terms of retail sales turnover.
The largest supermarket chain globally is US-owned Wal-Mart Stores Incorporated. The other major global supermarket chains mainly originate in Europe (which includes Carrefour, Metro Group, Tesco, Schwarz, REWE, Edeka Group, Aldi, Auchan Group) or the US (which includes The Kroger Company and Costco).