Grocery story
Representation photo Pixabay

Australian consumers shopping at Aldi are paying 25% less for grocery items compared with Coles and Woolworths, which charges near-identical prices, a study by the consumer advocacy group Choice has revealed.

In the report, Choice states the price difference for a basket of 14 items, including apples, bread, milk and cheese bought at the two supermarkets -- Coles and Woolworths -- is less than $1, The Guardian reported.

The government-funded research to study grocery price comparisons was aimed at probing allegations that the supermarket giants were indulging in price gouging with suppliers, while hiking it for consumers. At the March's Senate inquiry, fruit and vegetable growers were the most outspoken about the two supermarket giants driving down prices.

Jolyon Burnett, from the National Farmers' Federation, said, "Price matching, if practized by supermarkets, would be an example of a factor other than pure supply and demand influencing the pricing of fresh products."

The findings revealed Aldi's basket of groceries cost an average of AU$51.51, Woolworths at AU$68.58, and Coles basket cost AU$69.33. The mere price difference of less than $1 at the two supermarkets have raised concerns if the big two were competing against each other.

"We've seen a rise in split-basket shopping during the last couple of years as households have felt cost-of-living pressure ... (which) is going to put more competitive pressure on the majors," AAP quoted Competition Minister Andrew Leigh.

Ashley de Silva, the chief executive of Choice, said people's locations determined how much they shelled out for groceries. For example, Tasmania and NT faced higher grocery prices due to the lack of Aldi shops.

"If you live in Tasmania or the Northern Territory, you're paying significantly more each week for your groceries," he said. "However, this is mainly due to the fact that these areas have more limited options for shopping than the rest of the country, with no Aldi in Tassie or the NT."

The federal government has granted AU$1.1 million to Choice to publish quarterly reports for the next three years. The reports will provide insight into price movements of popular items. A federal review had demanded a mandatory code of conduct between supermarkets and suppliers, expected to be finalized by the end of June.

Both the supermarket majors disputed the research reports.

"We welcome Choice's contribution, however, it is unclear whether like-for-like products are being compared," Coles spokesperson said Thursday. "Our analysis last week comparing the same basket in NSW shows customers can purchase these products for $59.35 at Coles."

A Woolworths spokesperson stated that customers choose to shop with them "because of the wide range of high quality products at competitive prices."

While, Coles and Woolworths collectively control about two-thirds of the supermarket sector in Australia, Aldi has a share of about 10%.

Greens senator Nick McKim pointed out the need for more choices in the sector.

"It beggars belief that there could be just one per cent difference in prices between the duopoly," he said. "The choice between Coles and Woolworths is no choice at all."