Australia grocery retail market seen growing to $79.2B by 2034

By AI, Created 5:24 PM UTC, May 18, 2026, /AGP/ – Australia’s grocery retail market reached $54.3 billion in 2025 and is projected to climb to $79.2 billion by 2034 as online shopping, private labels and AI reshape how Australians buy food. Coles, Woolworths and ALDI are also accelerating automation, delivery and price competition as regulators tighten scrutiny on supermarket consolidation.

Why it matters: - The Australia grocery retail market is becoming more competitive as price pressure, online demand and regulation reshape where shoppers buy essentials. - The shift affects supermarket margins, supplier relationships and the pace of technology investment across the sector. - The market reached $54.3 billion in 2025 and is projected to hit $79.2 billion by 2034, according to IMARC Group.

What happened: - IMARC Group published a 2026 market outlook on Australia’s grocery retail sector on May 14, 2026. - The report says the market is set to grow at a 4.16% CAGR from 2026 to 2034. - Woolworths, Coles and ALDI remain the biggest forces in the market, with Woolworths and Coles together holding about 65% share. - Four major retailers control more than 80% of grocery sales across Australia.

The details: - Online grocery retail is the fastest-growing channel, with the segment projected to reach $96.585 billion by 2034 at a 20.37% CAGR. - Same-day delivery, click-and-collect and automated fulfilment infrastructure are driving that growth. - Private-label products are gaining share as cost-of-living pressures push shoppers toward store brands. - ALDI has expanded to more than 602 stores in Australia and reports annual sales above AUD 13.3 billion. - Health-conscious shoppers are increasing demand for organic, plant-based, free-range and sustainably packaged products. - New South Wales and the Australian Capital Territory hold the largest regional share of grocery retail revenue. - Dense population, high urbanization and strong online grocery adoption in Sydney are supporting that lead. - The report flags a mandatory merger notification regime starting in 2026 that will require major supermarkets to notify acquisitions of supermarket businesses or land. - The report also highlights rising regulatory scrutiny on pricing, supplier relationships and market concentration.

Between the lines: - Grocery retailers are responding to a more fragmented shopping pattern as households cross-shop for value. - The push into AI suggests the competitive edge is shifting toward speed, inventory accuracy and lower operating costs, not just store footprint. - The focus on local, organic and sustainable products shows supermarkets are competing on values as well as price. - 91% of Australian retail businesses are investing in generative AI, underscoring how quickly digital tools are moving from pilot programs to core operations.

What’s next: - Coles is expanding its Uber Eats partnership, increasing available items by more than 50% for rapid delivery. - Woolworths is targeting more than 60,000 online orders a week at its Moorebank Customer Fulfilment Centre in Sydney. - Coles is deploying Instacart’s Caper Cart smart trolleys in Melbourne stores to let customers shop, bag and pay without a traditional checkout. - Coles’ Witron-powered automated distribution facility in Truganina, Victoria, and Woolworths’ Moorebank centre point to more investment in automation and fulfilment. - Retailers are likely to keep expanding private labels, discount formats and online delivery options as competition intensifies.

The bottom line: - Australia’s grocery market is still growing, but the battle is shifting to automation, delivery speed, private labels and price.