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Griffith G, Wright V. The Case of Australia. 2009.
Please use this identifier to cite or link to this item: http://e-publications.une.edu.au/1959.11/8889
The Case of Australia
Australia has experienced a half-century of retail development, which has seen supermarkets move to predominance in food retailing. Prior to the 1950s self-service food retailing was unknown in Australia. Stores were then characterized by considerable specialization with customers needing to visit a grocery store, a fruit and vegetable store and a butcher's shop to satisfy household food needs. Most stores were independently owned. Rapid urbanization in Australia in the 1950s and 1960s created economic conditions, which favored the establishment of supermarkets as the dominant food store format. However the nature of the market environment means that the variety of food retail stores is relatively narrow in Australia. Traditional markets have never played a significant role, hypermarkets are rare, and deep-discount retailers are a relatively recent phenomenon. This reflects the high degree of urbanization and suburbanization, small aggregate population and geographical isolation from other Western culture food markets. Further, these same characteristics of the market have provided strong incentives for takeover and merger activity such that the two dominant supermarket groups (Coles and Woolworths) now control something in the order of 80% of grocery sales, depending on definitions. Conversely, supermarket dominance has not provided sufficient incentives for foreign investment until very recently, with the entry of Aldi from Germany, Pick'n Pay from South Africa, and Costco from the United States.