Biggest  Bread Market Players in Australia Grow Their Share

Supermarket giants Woolworths Group and Coles Group dominate the Australian bread market, according to the research company Roy Morgan.

The two players represent a combined 51.9% of the USD2.9bn fresh bread market, according to the latest results in the year to June 2018, shared by the researcher.

In total, supermarkets now comprise over two-thirds of the entire fresh bread market with the remaining 31% split between specialty bread shops including Bakers Delight, Brumby’s Bakery and other bread shops, and between delicatessens, milk bars, convenience store, and other stores.

Over the last eight years, there have been three stand-out performers in the fresh bread market. Coles Group has grown its market share by an impressive 6.2% to 25.3%, German supermarket chain Aldi has grown its market share by 3.1% to 7.1%, and specialty bread shop Bakers Delight now has a market share of 13.6%, up by 0.5% from June 2010.

Despite facing a resurgent Coles in recent years, Woolworths has retained its title as Australia’s largest retailer of fresh bread capturing a market-leading 26.6% of the fresh bread market. However, Woolworths has recorded a decrease in its market share of 0.5%.

Other outlets for fresh bread, including IGA and other supermarkets as well as Brumby’s Bakery and other smaller bread shops and delicatessens, milk bars, convenience stores, etc., have also suffered declines in their share of the fresh bread market of 1 – 2.4%.

These results are from the Roy Morgan Single Source survey of over 50,000 people per annum, including over 12,000 grocery buyers and covered in the latest Roy Morgan Supermarket Grocery Currency Reports.

Michele Levine, CEO, Roy Morgan, said that  the success of Bakers Delight and Aldi in growing market share shows there is space for nimble competitors, although Woolworths and Coles have now comprised over 50% of the fresh bread market for over five years:

“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 & vegetables and fresh bread. Between them, Woolworths and Coles now have nearly 52% of the Australian fresh bread market. However, although the two clearly dominate Australia’s fresh bread market, the growth this decade has been led by Coles Group which has significantly increased its market share by 6.2% to 25.3% while Woolworths is little changed with 26.6% of the fresh bread market,” Levine says.

She also highlights two competitors, Aldi and Bakers Delight, who are outside the ‘Big Two’ and have grown their share of the fresh bread market and they come from very different origins (the “Big Two” being Woolworths and Coles).

The first company is German discount supermarket chain Aldi who has made a huge impression on the Australian marketplace since opening its first store just over 15 years ago in 2001 and now captures 7.1% of the fresh bread market, up 3.1% since 2010. “Aldi’s success has been built upon not only discount prices, but also a reputation for reliability, meeting the needs of consumers and being honest about what it has to offer. Aldi has consistently rated as one of Australia’s most trustworthy brands including retaining its spot as Australia’s most trusted brand in this week’s Roy Morgan Net Trust Score survey for July,” adds Levine.

In addition to Aldi and Coles, the other success story in the fresh bread market over the last eight years has been the Australian owned bakery chain Bakers Delight. Bakers Delight has resisted the strong competition in the fresh bread market to grow its share by 0.5% to 13.6%. “Bakers Delight trails only the ‘Big 2’ as an outlet for fresh bread and this shows that a well-run business can take on and beat more highly capitalized competitors with a well-defined strategy in a ‘niche’ market by offering great customer service and excelling at their core competency,” Levine adds.