The economic contribution of small to medium-sized grocery ...

National overview of the retail and grocery industries
However, the nature of the dominance of the top two major retailers in Australia is
stronger. There are suggestions that Coles and Woolworths do not often compete in a
single shopping area and effectively provide a similar offering to consumers (ie
promote themselves as providers of fresh grocery products with low prices on a
selection of core goods). This indicates that potentially there should be greater
concern and interest in Australia in the future implications of such high market
concentration on competition and consumer welfare in the supermarket and grocery
market.
2.2.2 Spending patterns
It is anticipated that spending patterns differ considerably between independent
retailers and MGRs. Anecdotal evidence suggests that consumers spend smaller
amounts more frequently at independent local retailers, with the average spend being
less than $30. 34
However, the average spend at a major chain retailer is likely to be larger, but less
frequent. Average weekly household expenditure on food and non-alcoholic
beverages is estimated to be equal to approximately $145, and this figure is higher for
families with children. 35 It is estimated that households that spend a larger proportion
of this figure in a single visit to the supermarket are more likely to do so at an MGR.
An example of the potential distribution of grocery spending at independent retailers
and major chain stores, shown below in Figure 2.12, may better illustrate the possible
difference in spending patterns that exist between SMEs and MGRs.
Figure 2.12: Comparison of average spending patterns at SMEs and MGRs
Frequency of
Average
Spend
SME = $25
MGR = $40
MGR spend > $100 = 10% of total visits
SME spend > $100 =