Managing household expenses in the face of rising living costs is a challenge many Australians face, with groceries often making up a significant portion of the budget. Across the country, a diverse range of supermarket chains and discount retailers are stepping up to provide shoppers with cost-effective solutions. From no-frills stores offering everyday essentials at competitive prices to bulk-buying options for larger families, these outlets cater to various needs and preferences.
This article delves into the landscape of affordable grocery shopping, examining how key players in the industry help consumers save money while maintaining quality. Whether you’re exploring bulk bargains, specialised discounts, or loyalty rewards, there are plenty of opportunities to make the most of your grocery budget.
Affordable Approach to Grocery Shopping
Aldi
German company Aldi has become synonymous with affordability and is renowned for its no-frills approach to grocery shopping – accounting firm PwC gave the company high marks in its 2023 report for pricing controls that enabled customers to save as much as $3.4 billion last year despite cost-of-living increases. In a submission to the Queensland Parliament Supermarket Pricing Inquiry, Aldi officials said the affordable prices enable the average Aussie family shopping in an Aldi branch to possibly save up to $2,538 a year. The 2023 Customer Satisfaction Awards by market analysis firm Roy Morgan gave Aldi a four-peat in the Supermarket of the Year category, earning a 95.7 per cent score, based on on-site evaluations.
By streamlining their operations and offering a limited selection of private-label products, Aldi keeps prices low while maintaining quality. Shoppers can expect to find a wide range of everyday items, including fresh produce, dairy, snacks, and household essentials, at competitive prices. On average, shoppers can save between 15-20 per cent compared to shopping at other major supermarkets. A closer look at some price comparisons may give you ideas: an evaluation by MOZO of 12 common products revealed that on average, two litres of full-cream milk will cost you $3.09 and 700 grams of eggs costs $4.49 at Aldi but they may cost a few more cents at Woolworths, Coles, and IGA.
Costco
American company Costco operates on a membership model and is known for offering products in bulk at significantly discounted prices. While the membership fee is an initial investment, the potential savings can be substantial, especially for larger families or those willing to share bulk items with friends or neighbours.
Costco’s selection includes everything from groceries to electronics, making it a one-stop shop for many household needs. Although a one-year Gold Star membership at Costco sets you back $65 and $130 for the Executive programme, the tradeoff may be in terms of bigger savings – the Daily Mail took note of some shoppers who claimed a basic trove of groceries at Costco only cost them $593 – against $783 at Coles.
2023 turned out to be a strong year for the store chain. Company CEO for ANZ Chris Tingman said in a The Australian interview back in January 2024 that cost-of-living hikes and tough competition helped Costco set up some good pricings. It resulted in sales going up 20 per cent from the 2022 tally, to $4.5 billion. Although the chain has 15 branches in Australia, it is preparing to open 20 more branches over the next five years, but there are also plans to increase the membership fees though.
However, it has not been smooth sailing – growing state and Melbourne City Council expenses are forcing the company to prepare shutting down the Docklands branch late this year and stand up a replacement site out in Ardeer. The move will leave Costco without a presence in downtown Melbourne, considering its other branches out in Epping, Ringwood, and Moorabin.
The Reject Shop
While not a traditional grocery store, The Reject Shop offers a range of discounted products, including non-perishable groceries, snacks, and cleaning supplies. This chain specialises in selling excess stock, discontinued items, or products with minor imperfections. The company hit FY24 running with the H1 sales output recorded at $458.3 million, a 4.2 per cent year-on-year increase. At present, there are 383 branches up from 376 in December 2022.
While the selection might be more limited compared to dedicated grocery stores, the potential for savings can be considerable. Company managing director Steven Fisher said the savings helped generate more customer traffic especially with new general and seasonal merchandise coming on stock.
A customer recently discussed in a social media video prices of some items they bought in a The Reject Shop branch against what those will fetch in Woolworths. For example, a 110-pack of Finish Classic Dishwashing Tablets supposedly goes for $26 at Woolworths but The Reject Shop sells it for $19 and if you’re a fan of McVities’ Digestive cookies, you can find a pack at The Reject Shop for $1.50 – just 50 cents off Woolworths’!
IGA
Independent Grocers of Australia (IGA) consists of a network of local grocery stores that cater to specific communities. While some IGA stores might have higher prices due to their smaller size, many IGA outlets are committed to competitive pricing and offer regular specials and promotions. Shopping at your local IGA can contribute to supporting local businesses while saving money on everyday essentials. A 2021 study by Choice AU noted that in terms of basic national brand basket totals, a haul at IGA may set you back $142.79 against Woolworths ($141.83) and Coles ($145.23).
Coles and Woolworths
Coles and Woolworths are two of the largest supermarket chains in Australia, and they often compete with each other on pricing. Both offer a range of private-label products, which tend to be more affordable than brand-name items. Shoppers can also take advantage of weekly specials, loyalty programmes, and rewards to maximise savings.
In the above MOZO study, Coles and Woolies tied for the most affordable kilo each of chicken breast fillet ($15), minced beef ($14, tie with IGA), and rice ($1.40), plus 500 grams pasta ($2.10, tie with IGA). Coles, however, did better in terms of bananas ($0.45/piece, tie with IGA), iceberg lettuce ($1.90 per piece), and a kilo of ground coffee ($12).
However, recent events have brought considerable heat on both companies.
In May 2024, allegations of price-gouging prompted the federal Senate Select Committee on Supermarket Prices to recommend a formal ban on price gouges but stopped short of setting up divestitures on major supermarkets like Coles and Woolworths. The months-long inquiry already forced Woolies CEO Brad Banducci to tender his resignation effective August 2024 amidst Senate threats of arrest for contempt in not speaking about the company’s return on equity.
Brand trust research from Roy Morgan also shanked Coles from the No 5 most-trusted brand list as of December 2023 to No 9 in the most-distrusted brands list in March 2024. Woolworths fell off the perch as the second-most-trusted brand to No 34 in the most-trusted list.
Estimating Grocery Savings
While the exact amount of money saved varies depending on individual shopping habits and preferences, it’s possible to estimate potential savings by considering average discounts and comparing prices.
For instance, a family of four spending $200 per week on groceries might save around $40-60 per week (20 to 30 per cent) by shopping at Aldi compared to other major supermarkets. If they shop at Costco and take advantage of bulk purchasing, the potential savings could be even more substantial, but it’s important to factor in the membership fee.
When shopping at discount outlets like The Reject Shop or taking advantage of specials and promotions at IGA, Coles, and Woolworths, the savings can accumulate over time. A conservative estimate might be around $20-30 per week, depending on the items purchased and the frequency of discounts.
Smart Tips for Grocery Savings
Saving money on groceries doesn’t have to be complicated. By adopting smart shopping habits, you can reduce your expenses without sacrificing quality or variety. Here are some practical tips to help you make the most of your grocery budget.
- Plan Meals and Create Lists: Planning meals and creating shopping lists can help you avoid impulse purchases and ensure that you only buy what you need.
- Compare Prices: Use price comparison tools and apps to compare prices across different stores and find the best deals.
- Buy in Bulk Wisely: Buying in bulk can lead to significant savings, but make sure you’re purchasing items that you will use before they expire.
- Loyalty Programmes: Join loyalty programmes offered by supermarkets to access special discounts, rewards, and exclusive promotions. Some programmes may offer gift cards, which carry potential to properly plan what to buy on a single card, subject to terms and conditions.
- Shop Seasonally: Purchase fruits and vegetables that are in season, as they tend to be more affordable and fresher.
Conclusion
Affordable grocery options are essential for individuals and families striving to make their budgets stretch further. In Australia, a variety of grocery outlets cater to cost-conscious consumers, offering competitive prices and potential savings. By shopping at Aldi, Costco, IGA, Coles, and Woolworths, or exploring discount outlets like The Reject Shop, savvy shoppers can make the most of their hard-earned money.
While the exact savings vary, adopting smart shopping strategies, comparing prices, and making informed choices can contribute to meaningful savings over time. As you navigate the world of affordable grocery options in Australia, remember that every dollar saved is a step towards achieving your financial goals and maintaining a balanced and sustainable budget.
DISCLAIMER: This article is for informational purposes only and does not constitute official financial advice. The prices listed herein may change without notice. QUICKLE has no working relationships with, and does not endorse, any particular supermarket retailer or product mentioned.
