Woolworths has emerged as the supermarket winning shoppers’ dollar amid cost-of-living crunch

Woolworths has emerged as the supermarket winning shoppers’ dollar as cost-crisis weary households keep value front of mind amid higher fuel prices and threats of more interest rate hikes.

After nearly two bruising years lagging major rival Coles, Woolworths has managed to keep its momentum in winning back shoppers and clawing back market share across the $140 billion supermarket sector.

Woolworths has long been Australia’s biggest supermarket with a store footprint of more than 1130, compared with Coles’ 867.

Revealing its latest fortunes this week, it appears Woolworths continues to make a resurgence as more consumers choose to shop at the Amanda Bardwell-led supermarket chain in the three months to the start of April.

For the past two quarters now, Woolworths has outperformed Coles in terms of sales growth.

Woolworths recorded comparable sales growth — which excludes new stores — of 5.3 per cent and 4.4 per cent in the third and second quarter, respectively.

Meanwhile, comparable sales were more subdued at Coles, which recorded growth of 3.6 per cent and 2.4 per cent over the third and second quarter, respectively.

That compares with the first quarter of the 2026 financial year, when Coles recorded a 4.6 per cent growth in comparable sales, against Woolworths’ marginal lift of 1.6 per cent.

Woolworths went from recording a growth of 5.5 per cent in the first quarter of 2024 to slumping to a growth of just 1.1 per cent later that year. In comparison, Coles posted a 4.2 per cent growth in the third quarter of that same year.

Competition

A damning report from the consumer watchdog last year confirmed Australia’s supermarket sector was highly concentrated with an oligopoly structure, dominated by Woolworths and Coles.

This week, Woolworths’ Ms Bardwell insisted the market continued to be competitive, particularly in online sales. She called out Costco’s partnership with DoorDash and Coles’ deal with UberEats as examples.

“We are seeing strong competition, particularly in areas like e-commerce, for example, where it really has continued to ramp up in terms of the customer interest in e-commerce as part of their grocery shopping,” Ms Bardwell said.

What the graph can’t tell us

The pair’s major rivals — Aldi, Amazon and Costco — are privately held and don’t reveal quarterly sales results. This makes it hard for direct comparisons.

But Aldi did reveal in corporate filings that its profit was down nearly 5 per cent in 2025. Amazon, meanwhile, had a profit and sales jump in Australia last year.

Battleground

Woolworths will take a profit hit and has frozen the price of 300 of its own label products over the next three months, showing it’s serious about trying to keep the momentum in its core business — supermarket shoppers choosing it over others.

At the same time, it and Coles are waiting for legal judgments in a Federal Court case brought by the consumer watchdog alleging illusory price discounts. The outcome of that case could shift public opinion.

Limitations of this graph

Coles and Woolworths’ comparable sales for quarters three and four in the 2025 financial year have been normalised to remove the impact of the extra week the prior year.

Fourth quarter sales results in 2024 for both supermarkets have also been adjusted to remove the impact of the extra week in the financial year.