Online grocery retail players in Australia
Australia’s online grocery and liquor expenditure remains mainly in the domestic market, with online grocery expenditure to domestic merchants witnessing strong year-on-year growth as of January 2024. Supermarket giants Woolworths and Coles dominate Australia’s online and offline grocery retailing, with Woolworths controlling the highest share of the country’s online grocery market as of the third quarter of 2023. German supermarket chain Aldi, which has been gaining on the ‘Big Two’ supermarkets in the country’s offline grocery scene, remains behind its competitors as it has yet to enter Australia’s online grocery ecosystem. In a survey conducted in mid-2022, more than half of Australian online grocery shoppers indicated they would like to see Aldi offering online food ordering in the future.With Aldi out of the mix, e-commerce giant Amazon, with Amazon Fresh and Amazon Pantry, is the next most prominent online grocery market player. Meal kit delivery services such as HelloFresh, Marley Spoon, EveryPlate, and Youfoodz also make their mark; nevertheless, they are often regarded as too costly among consumers.
Why are Australian consumers not so keen on online grocery shopping?
Compared to other countries in the Asia-Pacific region, Australia has a relatively low online grocery shopping engagement rate. Offline and hybrid shopping remain the preferred ways of purchasing groceries among Australian consumers. Less than two percent of grocery shoppers indicated in a mid-2022 survey that they buy grocery products exclusively online. Many consumers nationwide still feel that grocery purchasing in physical stores accounts for a better overall shopping experience due to a broader food selection, better availability, value for money, and quality.Furthermore, when shopping for groceries online, several customers reported issues with food freshness, too many substituted items, incomplete ingredient and allergen lists, high delivery charges, and high minimum order values. Offering better deals, fast, cheap delivery options, a more extensive assortment of goods, and an easily accessible, convenient online experience are just a few incentives that could make online grocery shopping more appealing to customers in times when Australian households are grappling with inflationary pressures.
