Coles and Woolworths are closely monitoring Amazon’s prominent infiltration into the Australian market, especially fresh products.
According to The Nightly, Aldi, seen for years as a more direct competitor to Coles and Woolworths, spent $7 billion to scale up in Australia over 23 years. But Amazon puts Aldi to shame with its $5 billion spent in Australia in 2022 alone.
Amazon has the size, the money, and the capacity to be in a league of its own. But this is scaring local grocery stores like Woolworths and Coles.
In November, Amazon opened its new fulfillment center (FC) in Perth. It was prepared to expand with speed in a 20,000 square meters space, with a capacity to keep over three million items ready to be shipped off as orders.
Located in Jandakot Airport Commercial Precinct, it doubled the size of its previous Perth Airport FC. The “investment in this site” has been earmarked to increase their collection of items that can be shipped directly to local customers “quicker.”
Among the items to be sold from this FC were “pantry food and drink staples.”
Appearing before the senate
Last week, while appearing in the Senate, Coles boss Leah Weckert acknowledged that Amazon has become a “significant player in the packaged grocery space.” She also highlighted its expansion into fresh products.
It’s being reported that Weckert accused Amazon of “setting up a more traditional offering” while they vigorously entered the grocery space, creating aggressive competition.
The supermarket executives were grilled about price extortion allegations following customer complaints. In December, Australia’s third largest political party, the Greens, pressured the government. Over 4,000 signatures were placed on a petition to investigate the matter.
The Greens claim Australians struggle to make ends meet while supermarkets like Coles and Woolworths are “jacking up their prices.”
Grocery war in the US
The same ‘grocery war’ is playing out in the US. There appears to be a fierce rivalry between retailers operating in the grocery space. They are all trying to outmatch one another on convenience. Amazon, Walmart, and Target are the front runners.
Now, Amazon is offering fresh food delivery to non-Prime members and is piloting computerized warehouses. The e-commerce giant has impressive technology, but will it be enough to push Amazon Fresh stores to the leading spot?
The Nightly reported that Amazon’s country manager, Janet Menzies, told The West Australian how proud she was that they were “forcing big rivals to shape upon delivery.”
If the fixation on delivery in Australia is what kicks Amazon, it surely scares Coles and Woolworths.
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About the author
Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.
