Australia Grocery Retail Market: Digital Disruption and Evolving Shopping Habits

Australia Grocery Retail Market Overview

Market Size in 2024: USD 52.0 Billion

Market Size in 2033: USD 77.3 Billion

Market Growth Rate 2025-2033: 4.51%

According to IMARC Group's latest research publication, "Australia Grocery Retail Market: Industry Trends, Share, Size, Growth, Opportunity and Forecast 2025-2033", The Australia grocery retail market size was valued at USD 52.0 Billion in 2024. Looking forward, IMARC Group estimates the market to reach USD 77.3 Billion by 2033, exhibiting a CAGR of 4.51% during 2025-2033.

How AI is Reshaping the Future of Australia Grocery Retail Market

• Smart Shopping Cart Revolution: Coles and Instacart launched AI-powered Caper Carts in Melbourne starting early 2025, featuring computer vision technology that automatically identifies products, calculates prices, and enables seamless checkout experiences, positioning Australia as a leader in grocery technology adoption globally.

• Predictive Inventory Management: Woolworths leverages AI-driven demand forecasting tools to analyze customer purchasing patterns and predict product demand with remarkable accuracy, optimizing inventory levels to ensure popular products remain in stock while reducing waste by up to 30% across their 1,100+ stores nationwide.

• Personalized Customer Experiences: Major retailers including Coles and Woolworths deploy machine learning algorithms to create tailored product recommendations and custom marketing strategies, analyzing consumer behavior to deliver targeted promotions that have significantly enhanced both sales performance and customer satisfaction scores.

• Automated Operations and Cost Reduction: AI-powered automation is transforming logistics and supply chain operations, with self-service technologies replacing traditional checkout staff while advanced analytics optimize staffing, reduce operational costs, and improve efficiency across hypermarkets and supermarkets throughout Australia's competitive retail landscape.

• Intelligent Waste Reduction Systems: Food waste prevention technologies like the Gander app integrate with retailers' point-of-sale systems to showcase markdown products to consumers, helping retailers recover revenue from items approaching expiration dates while supporting sustainability goals—with the app already saving millions of food items from waste in over 500 stores.

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Australia Grocery Retail Market Trends & Drivers:

Australia's grocery retail market is experiencing robust growth driven by rapid urbanization and population expansion, particularly in metropolitan areas where new residential complexes and shopping centers are creating increased demand for accessible grocery options. The growing cultural diversity of Australia's population is fueling demand for specialty and culturally-targeted products, encouraging retailers to expand their international food selections and cater to diverse consumer preferences. Major players are investing heavily in expanding their store networks to serve these growing urban populations, while smaller format stores in high-density areas are gaining popularity among time-conscious consumers.

The digital transformation of grocery shopping has accelerated dramatically, with e-commerce platforms becoming essential business channels for major retailers like Coles and Woolworths. Online grocery shopping surged during the pandemic and continues growing as consumers embrace the convenience of click-and-collect services, home delivery options, and same-day fulfillment. This shift has forced traditional brick-and-mortar retailers to develop sophisticated omnichannel strategies, investing in digital infrastructure, mobile apps, and integrated shopping experiences that seamlessly blend online and offline retail touchpoints.

Consumer preferences are increasingly focused on health-consciousness, sustainability, and locally-produced goods, reshaping product offerings across Australia's grocery landscape. Shoppers are demanding organic foods, plant-based alternatives, and products with sustainable packaging, while showing strong preference for Australian-made goods that support local economies and reduce carbon footprints. The expansion of private-label brands by major retailers like Woolworths and Coles offers consumers more affordable alternatives to name-brand products without compromising quality, allowing retailers to better control supply chains, reduce costs, and increase profit margins in an intensely competitive market environment.

Australia Grocery Retail Industry Segmentation:

The report has segmented the market into the following categories:

Product Insights:

• Food and Beverages (Fresh Food, Packaged Food, and Beverages)

• Non-Food Items (Household Cleaning Products, Personal Care Products, and Pet Care Products)

Distribution Channel Insights:

• Hypermarkets and Supermarkets

• Convenience Stores

• Discount Stores

• Online

• Others

Breakup by Region:

• Australia Capital Territory & New South Wales

• Victoria & Tasmania

• Queensland

• Northern Territory & Southern Australia

• Western Australia

Recent News and Developments in Australia Grocery Retail Market

• November 2024: Coles partnered with Instacart to launch AI-powered Caper Carts in Melbourne, starting with Richmond Traders location in early 2025. These smart trolleys feature computer vision technology for automatic product identification and seamless checkout, marking Instacart's first retail partnership bringing advanced shopping cart technology to Australia.

• August 2025: Major retailers Coles and Woolworths restructured operations by adopting AI-driven automation and self-service technologies, with over 27,000 positions globally affected by AI implementation. The companies are focusing on AI logistics automation, data industrialization, and loyalty program weaponization to boost high-margin media assets.

• August 2023: The Gander app launched in Australia to combat food waste and reduce grocery costs for consumers. The platform connects shoppers with discounted products approaching expiration dates, helping retailers recover up to 7% of turnover typically lost to food waste while offering consumers savings of up to 75% on quality products.

• 2024: Woolworths expanded its AI and machine learning capabilities through partnerships with TCS, implementing data-driven retail strategies that optimize stock levels, create custom marketing approaches based on consumer behavior, and deliver enhanced customer experiences across their extensive store network.

Competitive Landscape:

The competitive landscape of the industry has also been examined along with the profiles of the key players.

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