AUSTRALIAN consumer watchdog Choice has launched a new quarterly report on supermarket prices across the nation, finding dramatic differences between retailers on a typical basket of groceries and fresh foods, including beef.

The Government-funded report comes after a groundswell of criticism over retail supermarket pricing in Australia, leading to six separate inquiries and hearings on the topic conducted through government and regulatory agencies since last year.

Choice has received a $1 million Federal Government grant to finance the quarterly surveys for the next three years, Beef Central was told.

Choice sent undercover shoppers into 81 supermarkets nationwide – 27 Woolworths, 27 Coles, 23 Aldi and 4 IGA – in 27 locations during March this year.

Supermarket locations were chosen to give good coverage of socio-economic status based on ABS Indexes and geographic spread across the country. Sites were surveyed in ‘clusters’ so that each store had local competition. IGA was only used as a proxy, when there was no ALDI nearby.

The 14 grocery and fresh food items included in the basket included beef mince, apples, carrots, Weet-Bix, sliced white bread, flour, penne, white sugar, tea bags, tinned diced tomatoes, a block of tasty cheese, full-cream dairy milk, frozen peas and butter. All were either national brand or comparable supermarket brand/budget brand options.

The survey produced a 25pc advantage in the bill at ALDI – pitched as a ‘no frills’ retailer – over Woolworths and Coles. The Aldi bill came to $51.51, while Woolworths was $68.58 and Coles $69.33.

Household budgets across Australia are being squeezed tighter than ever before and the price of basic grocery items has skyrocketed, Choice said in its survey summary.

“Unsurprisingly, the latest Choice Consumer Pulse survey reflects this. We found the cost of food and groceries is a concern for a huge 87pc of households,” it said.

“The level of trust people have in supermarkets has also plummeted in the last 12 months, with 39pc reporting they don’t trust supermarkets to provide the best service and products to meet their needs.”

When Woolworths and Coles announced massive profits during a cost-of-living crisis in 2023, it prompted Choice to award the supermarket duopoly a (sarcastic) Shonky award.

It was against this backdrop of increasing distrust in big supermarkets and continuing concerns over the price of food and groceries, that Choice received funding from the Federal Government to run supermarket price research every quarter for the next three years, the watchdog said.

“Our regular examination of prices across the country will not only help hold supermarkets to account, but also help shoppers save money on their groceries.”

Choice declined to nominate which minced beef category (regular, lean, extra lean) was included in its survey, or the prices paid, but a spokesperson told Beef Central that the category selection was consistent across the three retailers. A short video accompanying the release of the first survey clearly shows a 500g pack of Woolworths Regular mince (82CL) being selected. Choice also said that future quarterly surveys may not necessarily choose the same red meat item as today’s inaugural survey.

Price comparisons

As a guide, Woolworths this morning was selling:

• Regular beef mince (82CL) for $6.50/500g ($13/kg, down from $14/kg)
• Lean beef mince (90CL) at $9/500g ($18/kg, down from $19/kg)
• Extra lean beef mince (95CL) at $10/500g ($20/kg, down from $21)

Major rival Coles was selling:

• Regular mince (83CL) for $6.50/500g ($13/kg)
• Lean mince (90CL) for $9/500g ($18/kg)
• Extra lean beef mince (95CL) $10/500g ($20/kg)

ALDI pricing this morning included:

• Jindurra Station 5 star lean mince $7/500g ($14/kg, normally $18)
• Jindurra Station 4 star Certified Grassfed HGP-free mince $8.49/500g ($17/kg)
• Jindurra Station 3 Star beef mince – TBC – (figures will be added here later once confirmed).
• Jindurra Station 2 star mince – TBC

However it was in steak cuts, rather than mince, where the big price difference between Aldi and Coles/Woolworths become most apparent.

ALDI Jindurra Station porterhouse currently sells for $22/kg, rump steak for $23/kg and scotch fillet for $27/kg. Woolworths this morning was offering porterhouse for $37.50/kg, rump for $32/kg and scotch fillet for $47/kg.

Comparing apples with apples?

But are the examples above really comparing ‘apples  with apples?’

ALDI’s beef offer is divided into two tiers:

• Everyday beef offered under the Jindurra Station label, produced to the specs described below – the main seller through ALDI stores, and
• Specially Selected, a dedicated grainfed premium brand, covering mostly loin steak cuts and specialty items like Wagyu.

ALDI’s everyday Jindurra Station beef offer is obviously popular with its customers, winning last year’s Canstar’s Supermarket Meats “Most Satisfied consumer” awards for the mince, steak, sausages and burgers categories, with Coles topping the only remaining category, for roasts.

“Most Satisfied” is obviously a subjective term, but in this case clearly covers both price and quality (value for money).

So how does ALDI’s beef offer hold up against Coles/Woolworths?

Firstly, it should be remembered that ALDI pitches itself as a ‘No frills’ retailer. Price is a key feature.

The company for the past 16 years has sourced its beef offering from Northern NSW processor Bindaree Beef near Inverell, with product prepared in retail-ready form at Bindaree’s Gold Coast value-add facility.

ALDI specifies YP AusMeat cipher (up to four four tooth) steer or heifer, composite breeds, MSA graded, meat colour 3 or better. Cattle may have some grain assistance at different times of year, but are not specifically Grainfed.

In comparison, Woolworths and Coles accept only YG cipher (0-2 tooth) steer or heifer, grainfed at least 60-70 days, MSA graded, and identified (WW). Meat colour is limited to 2. Breed types are closely specified, with a drift (over time) away from higher indicus content. Coles product also carries a no HGP factor, which under MSA grading has additional positive impact on tenderness.

Simply put, Woolworths and Coles both offer a better standard of beef than Aldi, measured by any reasonable benchmark, but the point is, does the customer really care or notice, if the price is right?

Where both Coles and Woolworths have additional costs through their sophisticated red meat supply chains, Aldi uses a team of ‘just four or five’ to manage its beef supply, Beef Central was told.

“They don’t have 120 people in the beef division,” one keen observer told Beef Central.

“As good as the product is, the cost structures for the ‘red and green’ retailers are monstrous,” he said.

“In contrast, the Aldi model is made for Australia at the moment, because everybody’s hip pocket is looking for value. Unfortunately, if your supply chain is too complex, it’s really hard to put that back into the price paid by the consumer – unless you are discounting or loss-leading, simply to get customers through the door.”