With local customers who potentially have more cash to spend, the Emirati hypermarket has slightly higher prices for all but one of four everyday items.<\/p>\n
Milk A photo of a carton of milk.(ABC News Graphics: Lindsay Dunbar)<\/p>\n
What shoppers can expect to pay for two litres of milk.<\/p>\n
StoreCostWoolworths$3.20Coles$3.20Aldi$3.19IGA$4.10LuLuAED 12.10 ($4.98)Eggs A photo of a 12 pack carton of eggs.(ABC News Graphics: Lindsay Dunbar)<\/p>\n
Aldi offers the cheapest option for a 12-pack carton of free-range eggs across Woolworths, Coles and IGA. LuLu only offers a 10-pack carton.<\/p>\n
StoreCostWoolworths$6.60Coles$6.60Aldi$6.19IGA$8.10LuLuAED 21.24 ($8.83)Instant coffee A photo of an instant coffee.(ABC News Graphics: Lindsay Dunbar)<\/p>\n
What shoppers can expect to pay for 200 grams of instant coffee.<\/p>\n
StoreCostWoolworths$5.50Coles$5.50Aldi$5.49IGA$15.00LuLuAED 22.90 ($9.43)Toilet paper A photo of a toilet roll.(ABC News Graphics: Lindsay Dunbar)<\/p>\n
What shoppers can expect to pay for eight rolls of three-ply toilet paper.<\/p>\n
StoreCostWoolworths$8.00Coles$4.60Aldi$7.39IGA$4.60LuLuAED 18.75 ($7.72)’Colesworth’ holds more than 60 per cent of Australia’s grocery market<\/p>\n
Entry into Australia’s supermarket sector isn’t so simple, according to retail expert Lisa Asher from the University of Sydney.<\/p>\n
Aldi entered the market in 2001 and it had taken the company 24 years to get to 600 stores, which was a market share of slightly less than 10 per cent, she said.<\/p>\n
“So this idea that it’s easy to get market share when Aldi is one of the most innovative grocery retailing models that we have at the moment in the world,” she said.<\/p>\n
“It highly underestimates how hard and how long it takes to be able to have an impact in the Australian market and be able to adequately grow stores.”What are the barriers to entry?<\/p>\n
The barriers to entering the Australian supermarket sector, especially in metro areas, is as simple as finding suitable enough space to set-up stores.<\/p>\n
The tactics Coles and Woolworths use to keep prices high, and competitors out<\/a><\/p>\n Four Corners has spoken to insiders, experts, and the supermarket CEOs themselves to find out just how they operate.<\/p>\n That is according to supply chain expert Dr Sanjoy Paul from the University of Technology Sydney.<\/p>\n Dr Paul pointed to German supermarket giant Kaufland which highlighted a lack of suitable sites as a reason it abandoned plans to enter Australia.<\/p>\n Last year, Four Corners reported<\/a> in one growing community west of Brisbane, Woolworths has bought more than six hectares of land over 11 years but setting up an actual supermarket is still years away.<\/p>\n “It’s very challenging task to get suitable locations \u2026 existing supermarkets capture land in some strategic locations,” Dr Paul said.<\/p>\n Ms Asher added LuLu’s status as a hypermarket made entry into Australia more difficult because of the space it required.<\/p>\n A hypermarket was a supermarket attached to a mass merchant such as Kmart or Target<\/p>\n “That in itself requires a significant amount of space just like Kaufland needed. And that makes sites almost too hard to find,” she said.<\/p>\n But Dr Paul said LuLu had an advantage because they had existing relationships with Australian producers.<\/p>\n “When you see Australian meat producers, vegetable producers and other food producers, manufacturers, they are already selling some of our Australian products in UAE,” he said.<\/p>\n The Australian Food & Grocery Council, the peak body for the grocery supply industry, has declined to comment.<\/p>\n Is breaking up the big supermarkets a solution?<\/p>\n Prime Minister Anthony Albanese ruled out proposed divestiture laws, saying last year that Australia was “not the old Soviet Union” and he would not forcibly break up the supermarket giants.<\/p>\n Those powers, which the Coalition pledged to introduce <\/a>if it won the federal election in May, could be used to break up the supermarket giants if they were behaving anti-competitively.<\/p>\n Loading…<\/p>\n Dr Paul also did not believe divesture was the answer, saying there were other ways to deal with market concentration.\u00a0<\/p>\n “How are [major supermarkets] dealing with their suppliers? Are there any breaking of laws or how they are establishing relationships?” he said.<\/p>\n “So that kind of anti-competitive behaviours if there is any, we need to establish clear policies around that.”<\/p>\n Ms Asher disagreed, highlighting that divesture powers existed in places such as the United Kingdom and United States.<\/p>\n Without these powers in Australia, she said retailers such as Coles and Woolworths had minimal competition.<\/p>\n