Coles Supermarket and the Australian Grocery Industry

Lanting Xu ()
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Lanting Xu: University of Queensland

A chapter in Proceedings of the 2023 2nd International Conference on Economics, Smart Finance and Contemporary Trade (ESFCT 2023), 2024, pp 367-376 from Springer

Abstract: Abstract The market structure of the supermarket and grocery industry in Australia is oligopolistic. Coles and Woolworths, two local Australian companies, account for more than 60% of the market share. A market with a perfectly competitive structure has a freer competitive environment than an oligopolistic market, which can enhance the interests of consumers. In addition, the Australian supermarket and grocery industry market is highly regulated by regulators such as the Australia Competition and Consumer Commission (ACCC). Nevertheless, oligopolistic companies rely on their position in the industry to engage in illegal activities. In addition, it is challenging to accurately predict consumer preferences, as many factors affect consumption choices. Furthermore, the goods sold by Coles are daily necessities, and the price elasticity of such goods is low. This analysis combines Coles supermarket with the home appliance market as the changes in consumer demand for home appliances at Coles may have a spillover effect on the home appliance market. Coles has economies of scale and scope, which helps it to reduce marginal costs and become more competitive in the industry. In addition, Coles has changed its traditional advertising methods and now uses the Internet to attract younger consumers.

Keywords: Consumer preferences; Perfectly competitive structure; Complementary products (search for similar items in EconPapers)
Date: 2024
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DOI: 10.2991/978-94-6463-268-2_40

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