Supermarket giants are continuing to squeeze out independent retailers, with a look at Australia’s fresh bread market painting a gloomy picture for smaller retailers.
Worth an estimated $2.9 billion in Australia last financial year, the fresh bread market continues to be dominated by Woolworths and Coles, with the duo now making up more than two-thirds of the entire market.
Woolworths accounts for more than a quarter (26.6 per cent) of all bread sales nationally, with Coles close behind on 25.3 per cent, according to latest figures from Roy Morgan.
Aldi has more than doubled its share of the market over the same period, rising to 7.1 per cent from 3.1 per cent.
Sadly, this growth in market dominance has come at the expense of independent retailers including bread shops, delicatessans, convenience stores, IGA supermarkets and Brumby’s Bakery, who all saw declines in their market share.
“The dominance of Australia’s two supermarket giants Woolworths and Coles is well known with the two now comprising over half the Australian markets for fresh food including fresh meat, fresh fruit and vegetables and fresh bread,” said Roy Morgan CEO Michele Levine.
“Between them, Woolworths and Coles now have nearly 52 per cent of the Australian fresh bread market.”
The only bright spot beyond the major supermarket chains was specialty franchise Bakers Delight, which managed to increase its market share (albeit by just 0.5 per cent since mid 2010), to take 13.6 per cent of sales.
“The Australian-owned bakery chain Bakers Delight… has resisted the strong competition in the fresh bread market,” Ms Levine said.
“This shows that a well-run business can take on and beat more highly capitalised competitors with a well-defined strategy in a ‘niche’ market by offering great customer service and excelling at their core competency.”
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.