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Australian Retail Industry

459 Words2 Pages

IBISWorld analysis indicates that the intensity of competitiveness in Australia retail industry is high and pattern is expanding in the business (IBISWorld, n.d.). The four largest operators accounting for just under 80% of industry revenue. The Supermarkets and Grocery Stores industry is one of the most concentrated industries in Australia. Obtaining movement embraced by Woolworths and Coles has added to expanding industry focus since the mid-1970s. These two players alone record for over 60% of the business. In this past five years, strong growth of ALDI has increased industry intensity. ALDI has a reputation as a low-cost player that stocks a limited range of popular grocery items. In addition, there is a variety of independent supermarkets …show more content…

Retailers have to slice the prices so as to maintain consumer’s custom and loyalty. For example, Coles and Woolworths gained profits by selling more affordable products in order to stay competitive in the market (Merrett, 2016). The products two companies sold are identical and duopoly system is cutting down the price to keep up their market share. Woolworths' home brand deals is another great case. After lessened prices, the organization get income of about $1.4 billion yearly (Mortimer, 2016). The price war between Coles and Woolworths give the clear picture of the competitive importance of price (IBISWolrd, n.d.). As a result, identical products from major supermarkets lead to the increased of competitive market. According to the recent global financial crisis, customers generally consider price as a main factor when they have to purchase similar items from various sellers, due to higher levels of price sensitivity. The similarity of products means that customers that are not so loyal to the retailers can purchase from other stores if the price is better. Thus, customers will get benefit from the price war in short-run (Round,

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