The latest Fresh Produce Insights Report for December 2022 saw the past quarter return to growth in full-service supermarket sales, driven by higher price inflation and the lower hurdle of December 2021. Foodservice channels also continued to recover their share of the market, as the impacts of COVID-19 constraints receded. Meanwhile, greengrocers and independent supermarkets lost market share as shopping patterns returned to normal and price considerations led to increased patronage of Aldi.
Aldi gained market share in the fruit and vegetable segment, while Coles matched last year’s figures and Woolworths, independent retailers, and greengrocers lost small increments of share. This can be attributed to the increase in wholesale prices for fruits and vegetables, which rose by 14.98% in the December 2022 quarter compared to the previous year. The higher prices were due to the continued recovery of vegetable supply from weather damage and stronger prices for leading fruits.
Decrease in Retail Promotional Activity
Despite the increase in prices, there was a decrease in retail promotional activity of 6.3% due to concerns about amplifying supply shortages and substantially less activity leading into the festive season. Shopping trip patterns varied among the three major retailers, with Aldi and Woolworths seeing an increase in one-stop shopping trips, while Coles saw an increase in two-stop shopping trips.
Slowing runaway inflation has been the primary focus of the Reserve Bank of Australia and the decline in December 2022 retail sales is the first sign of the desired impact. However, the effect on the retail food industry remains unclear, with elevated price sensitivity expected.
Online Grocery Sales Impact
Online supermarket food and grocery sales decreased by 4.1% in the December 2022 quarter compared to the previous year, indicating a further easing in online sales. Despite some insulation from price inflation, these sales are estimated to have generated $190 million in fruit and vegetable online sales, which is a 9.5% decrease from the previous year. The full-service supermarkets are facing competition from delivery aggregators such as Uber and DoorDash.
In conclusion, the past quarter saw a return to growth in full-service supermarket sales, driven by higher price inflation and the lower hurdle of December 2021. The food and vegetable market saw varying patterns among the major retailers, with Aldi gaining market share while the others saw varying degrees of loss. The impact of inflation and its control by the Reserve Bank of Australia remains to be seen, but elevated price sensitivity is expected. Meanwhile, online sales decreased, with the full-service supermarkets facing competition from delivery aggregators.
Looking for More Fresh Produce Insights?
You can find out more up to date fresh produce insights on the Freshincite section of our website. We have a broad range of data and insights available including the latest trends and topics affecting the agriculture and grower industry in Australia.
You can also sign up for our Freemium Data Insights service where we send exclusive regular analytics based on the latest news and happenings in the fresh produce industry. Freemium subscribers get first look at industry trends, impacts and happenings.
Freshlogic are a Sydney based market research company specialising in fresh produce insights and market data, agriculture industry insights and retailer analytics. We provide a series of market insights across a range of products suitable for the food service industry and those looking to invest in businesses within the fresh produce industry. At Freshlogic we know that:
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