Grocery battle for fresh

FRESH produce will take centre stage in Australian supermarkets’ fight for market dominance, according to a report by UBS.

The bank’s survey of more than 1100 Australian grocery shoppers found that freshness was the key battleground in the Australian grocery market as retailers move away from focusing on low prices.

And this could herald good news for growers supplying the major retailers.

James Whiteside, chief executive of vegetable grower body Ausveg, was pleased to hear fresh produce was attracting shoppers.

“If low prices aren’t seen as a differentiator between retailers any more, and the major supermarkets are continuing to invest in the quality and width of their fresh produce ranges, we’d expect that this will lessen the downward pressures on farmgate prices,” Mr Whiteside said.

The UBS analysis of spending changes in February found price as a driver of spend is decreasing. Low prices are becoming an accepted part of a shop, not a differentiator.

Coles and Woolworths recorded strong gains in market share for fresh produce purchases, largely at the expense of IGA and specialist retailers.

“We believe this reflects continued investment in fresh quality and range by the majors [and Aldi], which has marginalised the advantage of many independents and specialists,” the report said.