Supermarket Price Matching: A Smart Way to Save Money

Grocery prices in Australia have climbed steadily, and two chains — Coles and Woolworths — now account for roughly two-thirds of supermarket sales. That kind of market concentration tends to soften the pressure to compete on price, which is one reason your weekly shop keeps costing more. The Australian Competition and Consumer Commission (ACCC) confirmed in its 2025 supermarket pricing inquiry that these oligopolies can limit the incentive to compete vigorously on price, and that there is a significant bargaining power imbalance between the big chains and their suppliers.

Disclosure: Some links on this page are affiliate links. If you make a purchase through them, Britwealth may earn a commission at no extra cost to you. We only include products and services that are relevant to the topic.

This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.

~66%
Combined market share of Coles and Woolworths
aph.gov.au

1 July 2026
Effective date for excessive pricing ban
aph.gov.au

$10 million
Maximum penalty per breach under new code
aph.gov.au

20,000+
Consumers who responded to the ACCC survey
aph.gov.au

New rules are coming. From 1 July 2026, very large retailers — those with annual revenue over $30 billion — will be banned from charging excessive prices for groceries under the mandatory Food and Grocery Code of Conduct. The ACCC will enforce it. But what does “excessive” actually mean, and how will it affect what you pay at the checkout? Here’s what you actually need to know.

What the new pricing rules mean for your grocery bill

Excessive pricing ban arrives mid-2026
From 1 July 2026, very large retailers must price groceries based on supply costs plus a reasonable margin. Prices set significantly above that level could breach the code.

Penalties are steep
The maximum penalty per contravention is the highest of $10 million, three times the benefit gained, or 10% of the company’s turnover during the preceding 12 months.

Supply chain costs must be tracked
Supermarkets, manufacturers, suppliers, and logistics providers must regularly report cost data. Third-tier suppliers are often invisible in current systems, making accurate tracking a challenge.

Consumer inertia is part of the problem
Research from the e61 Institute suggests that a lack of price competition between the big chains may be partly due to shoppers not switching stores. Price comparison platforms could help.

The central concept here is excessive pricing. The European Court of Justice describes it as a price that bears no relationship to the economic value of the product supplied. Australian law hasn’t historically defined it, but the new Food and Grocery Code changes that for the biggest players. The idea is straightforward: a price should reflect what it actually costs to get that item to the shelf, plus a reasonable margin — not whatever the market will bear.

Excessive Pricing
A price set significantly and persistently above the competitive level, or one that bears no reasonable relationship to the economic value of the product supplied.

What I tend to notice is that most people assume the big supermarkets already operate this way. The ACCC’s findings suggest otherwise. The inquiry found that Coles and Woolworths are among the most profitable supermarkets globally, which raises the question of whether current pricing reflects genuine costs or something else entirely.

What happens when pricing isn’t transparent

The ACCC’s final report, released in March 2025, made clear that the current system has real consequences. Over 20,000 consumers responded to the ACCC survey, and more than 100 public submissions were made. Eight supplier roundtables were held. The message was consistent: people feel they’re paying too much, and suppliers feel squeezed.

The ACCC found a significant bargaining power imbalance between Coles and Woolworths and some suppliers. When suppliers can’t push back on unfair terms, those costs don’t disappear — they get passed down the chain or result in fewer product choices. The Productivity Commission has noted “aggressive competition” between the two giants for market share, but that hasn’t translated into price competition across the sector.

The real cost of consumer inertia
The e61 Institute’s 2024 research note suggests that a lack of price competition between Coles and Woolworths might be partly due to consumer inertia — shoppers sticking with one store out of habit rather than actively comparing prices. The Institute recommended enabling price comparison platforms to increase incentives for supermarkets to compete on price.

During the COVID-19 pandemic, the government defined price gouging under the Biosecurity Act as selling essential goods at more than 120% of the initial purchase price. That was a crisis measure. The new rules are broader and permanent, targeting the structural issue of market power rather than just emergency profiteering. The trade-off is real: price limits can reduce financial burdens, but they can also reduce incentives for sellers to restock supplies, potentially prolonging shortages.

Where the system falls short — and what goes wrong

Excessive pricing is hard to define and prove

Australian law has never formally defined “excessive pricing” or “price gouging” in a general sense. The EU standard — a price with no relationship to the economic value of the product — is a useful benchmark, but it’s not easy to apply to thousands of individual products. The ACCC will need sophisticated price reporting and monitoring systems to enforce the new rules, and that requires significant resources.

Supply chain costs are incredibly complex

Supermarkets manage thousands of products sourced from hundreds of local and international suppliers. Costs vary across time and location. Third-tier suppliers — those further down the chain — are often invisible in current tracking systems but still contribute to the final cost. Ensuring data accuracy and integrity in the reporting system will require substantial effort from everyone involved.

The big chains argue the rules could backfire

Coles and Woolworths have pushed back, arguing that the new rules could drive up costs and reduce deals for consumers. Their position is that pricing already reflects a complex mix of supply, manufacturing, transport, warehousing, labour, rent, and other factors. If the code forces them to justify every price against a cost baseline, they say it could lead to less flexibility on promotions and discounts.

Consumer inertia isn’t addressed by regulation alone

The e61 Institute’s research points to a problem that rules can’t fix: shoppers don’t always switch stores even when prices are better elsewhere. The government funds CHOICE to conduct quarterly surveys comparing a basket of basic goods and highlighting home brand products, but awareness of these tools remains low. Without active comparison, the pressure on supermarkets to compete on price stays weak.

How the new pricing framework will work in practice

Who is affected by the excessive pricing ban

The rules apply to very large retailers — those with annual revenue exceeding $30 billion. In practice, that means Coles and Woolworths, and potentially Aldi if its revenue crosses that threshold. Smaller grocers, independent stores, and specialty retailers are not covered. The ban takes effect on 1 July 2026, giving the industry time to set up reporting systems.

What pricing must now reflect

Under the mandatory Food and Grocery Code of Conduct, pricing must reflect supply costs and a reasonable margin. That means supermarkets need to account for first-tier, second-tier, and third-tier supplier costs, plus logistics, warehousing, labour, rent, and other operational expenses. The ACCC will expect regular cost data reporting from supermarkets, manufacturers, suppliers, and logistics providers.

How penalties will be enforced

The maximum penalty per contravention is the highest of $10 million, three times the value of the benefit derived from the breach, or 10% of the company’s turnover during the preceding 12 months. For comparison, penalties under the broader Competition and Consumer Act 2010 can reach $50 million, three times the benefit, or 30% of adjusted turnover. The ACCC will need additional resources, including sophisticated price reporting and monitoring systems, to enforce the code effectively.

The role of price comparison tools

The government already funds CHOICE to produce quarterly price reports comparing a basket of basic goods. The e61 Institute has suggested that enabling easier price comparison platforms could help overcome consumer inertia and increase competitive pressure. If shoppers can see at a glance which store offers the better price on their regular items, the incentive for supermarkets to compete on price grows.

Frequently asked questions about supermarket price matching

Does the new code mean all grocery prices will be regulated?
No. Only very large retailers with revenue over $30 billion are covered. The code targets excessive pricing, not all pricing. Smaller stores and specialty grocers are not affected.
What counts as a “reasonable margin” under the new rules?
The code doesn’t specify a fixed percentage. It requires pricing to reflect supply costs plus a margin that isn’t excessive. The ACCC will assess this case by case using cost data reported by supermarkets and suppliers.
Can I report a supermarket for overcharging now?
Not under the excessive pricing ban — it doesn’t take effect until 1 July 2026. You can report concerns about misleading pricing or unfair practices to the ACCC under existing consumer law protections.
Will the new rules make home brands cheaper?
The CHOICE quarterly survey already highlights home brand products as a way to save. The new code may encourage supermarkets to price these more competitively, but there’s no guarantee of lower prices across the board.
What happens if a supermarket doesn’t report cost data?
Failure to report required data could itself be a breach of the mandatory code, attracting penalties of up to $10 million per contravention, plus potential action under the Competition and Consumer Act.
Does the code apply to online grocery prices?
Yes. The code covers all grocery sales by very large retailers, including online orders, delivery, and click-and-collect services. The same cost-reflective pricing rules apply regardless of channel.

What the pricing shift means for Australian shoppers long-term

The ban on excessive pricing represents a broader shift in Australia’s competition and consumer protection approach. Rather than just policing anti-competitive behaviour after the fact, the government is moving toward proactive price regulation for the biggest players. Whether that translates into lower prices at the register depends on how well the ACCC can enforce the rules and how supermarkets respond. The reporting infrastructure isn’t built yet, and the data integrity challenges are substantial. But the direction is clear: the era of asking what the market will bear may be ending for Australia’s grocery giants.

Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.

If this was useful, you might also want to read Reimagine Your Expenses: Turn Australian Necessities Into Savings Opportunities.

Sources and Further Reading

Fuel Up Your Savings With Discount Fuel Gift Cards — Practical ways to cut everyday costs using discounted gift cards at the pump and beyond.

Smart Tips to Save Money When Refinancing Your Home Loan — How to reduce your biggest regular expense by shopping around for better loan terms.

Parliament of Australia (2025). Supermarket Prices and Supplier Relationships. 🔗

e61 Institute (2024). Consumer Inertia and Supermarket Competition. 🔗

ACCC (2025). Supermarket Pricing Inquiry Final Report. 🔗

Share this

Facebook
Twitter
LinkedIn
Email

Sam Willy

I’m Sam Willy, one of the bright minds behind BritWealth.com, where I share insights, stories, and fun ideas about a wide range of topics—finance included, but not limited to it! My journey into the world of writing began with a simple hobby: sharing the things that fascinated me. From quirky facts to deeper dives into personal development, I’ve always been curious about the world around me and love passing that knowledge on.
Subscribe
Notify of
0 Comments
Oldest
Newest Most Voted

Disclaimer

The content published on BritWealth.com is provided for general informational and educational purposes only and should not be considered financial, legal, insurance, tax, investment, or professional advice. You should always carry out your own research or seek independent professional guidance before making financial or business decisions.

Some content on this website may contain affiliate links. This means BritWealth.com may earn a commission if you click through and make a purchase, at no additional cost to you. As an Amazon Associate, BritWealth earns from qualifying purchases.

While we make reasonable efforts to keep information accurate and up to date, BritWealth.com makes no representations or warranties, express or implied, regarding the completeness, accuracy, reliability, suitability, or availability of any content on this website.

Any reliance you place on information found on this site is strictly at your own risk. BritWealth.com will not be liable for any loss, damage, or consequences arising from the use of this website or reliance on its content.

By using this website, you acknowledge and agree to this disclaimer and our terms of use.

Table of Contents

Share This

On Trend

Readers'
Top Picks

Savings Showdown: Comparing the Best Bank Accounts for Aussie Savers

Choosing the right bank account can significantly impact your savings goals in Australia. With various options available, understanding the features, interest rates, and fees associated with each type of account is crucial for maximizing your returns and minimizing expenses. This article will guide you through the best bank accounts for Aussie savers, providing practical tips and insights to help you make informed decisions. Understanding Your Savings Goals Before diving into specific bank accounts, take a moment to clarify your savings goals. Are you saving for a short-term goal like a holiday, a mid-term goal like a car, or a

Read More »
Avoid These Budgeting Mistakes: Traps Aussie Savers Need to Sidestep.
Personal Savings

Avoid These Budgeting Mistakes: Traps Aussie Savers Need to Sidestep.

Budgeting in Australia, like anywhere else, is crucial for financial stability, but falling into common traps can derail even the best intentions. Aussies often underestimate the importance of meticulous tracking, overestimate income, and fail to account for irregular expenses, leading to budget blowouts. This article delves into these mistakes and more, providing practical strategies to navigate the Australian financial landscape and build a robust savings plan. The Siren Song of Ignoring Small Expenses: The Latte Factor and Beyond We’ve all heard of the “Latte Factor,” the idea that those small daily expenses, like your daily coffee, can add up

Read More »

Savings On Autopilot: Set & Forget Strategies Every Aussie Should Know

Automating your savings is like putting your financial life on cruise control. It removes the temptation to spend, consistently builds your wealth, and allows you to focus on other aspects of your life without constantly worrying about your savings goals. Many Australians struggle to save consistently, with studies showing that a significant portion have little to no savings for emergencies. This article dives into practical, set-and-forget strategies tailored for Australians, offering actionable tips to boost your savings without demanding constant effort. The Power of Automation: Why Set and Forget Works The beauty of automating your savings lies in behavioral

Read More »

Smart Tips For Scoring Cashback On Hotel Bookings In Australia

When planning a trip Down Under, one of the biggest expenses is often accommodation. But what if you could get some of that money back? Cashback offers on hotel bookings in Australia provide a fantastic opportunity to save some serious dollars. This article will give you the lowdown on how to maximize these cashback deals, ensuring your Aussie adventures are both memorable and affordable. Let’s dive in! Unlocking the Secrets of Cashback Programs Before we jump into the nitty-gritty of specific tips, let’s demystify cashback programs. Simply put, cashback is like getting a discount after you’ve already paid. It’s

Read More »

Top Tips For Financial Savings In Australia You Can Use Today

$225,000 Average household debt in Australia (2025) wealthherd.com 4.2% CPI increase in the year to April 2026 mozo.com.au ~$178 Average weekly grocery bill per household savingsroom.com ~5.5% p.a. Best ongoing conditional savings rate (June 2026) mozo.com.au The average Australian household carried $225,000 in debt in 2025, the latest figures from ASIC show. That number lands differently when you stack it against grocery bills running at roughly $178 a week and electricity prices that jumped 22–25% after government energy rebates expired. The gap between what comes in and what stays in your pocket has narrowed fast. What I tend to

Read More »

The Aussie Guide to Ethical & Sustainable Savings: Doing Good & Saving Money

Most Australians expect their money to do good in the world — 84% want their super invested ethically, according to the Mindful Investing report. Yet up to $450 billion in super savings is still sitting in companies Australians say they’d rather avoid. That’s a gap between what people want and where their money actually goes. For someone with a $100,000 super balance, that could mean thousands of dollars quietly funding industries they oppose. Disclosure: Some links on this page are affiliate links. If you make a purchase through them, Britwealth may earn a commission at no extra cost to

Read More »