Research shows that Australian brand loyalty alludes to one grocery store, alternatively reducing market competition and giving supermarkets more power. Matt Ellias, an author and economist claims customer behaviour also happened in areas with lack of competition and locations.
What this means is that convenience, unconscious habit and lack of resources to help shoppers find the best deal allows major market share leaders to dominate. In this case, Coles and Woolworths also have a huge competitive advantage and customers can locate these brands easier.
From this, major players can drive prices up as consumers are not exploring potential better options at alternative stores.
Research found that 70 per cent of individuals that shop at Woolworths as their main supplier, stay loyal six months later, only showing an 8 per cent decrease in
customer loyalty during that time. Whereas Coles had 62 per cent for one month and six months later, showed a total of 55 per cent.
Other factors such as parking availability and other amenities provided by the shopping centre, goes a long way as
an advantage for Coles and Woolworths.
Additionally, a survey conducted by mystery shoppers revealed that a basket of 14 grocery essentials, including fruits, vegetables, beef mince and cheese, were cheapest at Aldi, costing only $50.79. Coles totalled up to be $66.22, Woolworths at $68.70 and the same basket at IGA totalled to $78.95.
Everyday Australians need to shop around to ensure they are not paying overs for groceries and alternatively tearing the powers from Coles and Woolworths.