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Australian Supermarket Prices Compared With UK

November 8, 2011

I have been handed a comparison of Australian and UK supermarket prices for foodstuffs. 

Set out as well is the exchange rate conversion.

In the last column is the percentage by which the Australian price exceeds the British price.

This explains why everyone is talking about how Australia has become a very expensive place. And I’ve never read a convincing explanation.
 

  Tesco (pounds/kg) Tesco ($/kg) Coles ($/kg) Premium
Cherry tomatoes 3.34 5.43 8.00 47%
Cherry tomatoes (vine) 7.50 12.19 17.92 47%
New/baby potatoes 1.35 2.19 2.49 13%
Baking potatoes 1.12 1.82 2.49 37%
Sweet potatoes 1.24 2.02 3.48 73%
Carrots 0.56 0.91 1.98 117%
Parsnips 1.29 2.10 9.98 376%
Butternut pumpkin 0.80 1.30 4.98 283%
Zucchini 1.62 2.63 4.98 89%
Brown onions 0.87 1.41 2.28 61%
Broccoli 1.63 2.65 2.98 12%
Bananas 0.58 0.94 10.98 1064%
Granny Smith Apples 1.57 2.55 5.98 134%
Red seedless grapes 1.98 3.22 4.38 36%
Raspberries 8.00 13.01 55.84 329%
20 Comments
  1. Steve permalink
    November 8, 2011 2:37 pm

    ack of competition from imports, and lack of competition between major retailers?

  2. Geoff Corrigan permalink
    November 8, 2011 3:14 pm

    Bob the subsidization of agriculture in the European Union is the most probable cause. This subsidisation will eventually go the way of the RPS in the Australian Wool Industry. I can recommend to you a book “Breaking the Sheep’s Back” by Charles Massy which shows the eventual folly of such schemes.

    Geoff Corrigan

  3. November 8, 2011 3:35 pm

    I’m a travel writer and I travel continuously around the world, returning ‘home’ to Australia once a year to visit family. Our base has been the UAE since 1998, yet we also spend a lot of time in Australia. We’ve noticed prices creeping up in Australia on every visit for the last five years, but this recent visit has been the most staggering.

    We spent time in Tokyo, New York and London last year, all some of the most expensive cities in the world, but when it comes to things like groceries, transport, restaurant, and wine prices, Australia beats them all by miles, ahem, kilometres. I keep detailed notes to enable a comparison. Australians haven’t noticed because their salaries have increased in line with prices – Australia must have some of the most highly paid tradesmen in the world, I know they have the highest paid waiters.

    It is a very expensive place to visit and this is severely impacting tourism. Either the dollar has to drop or restaurants, hotels, attractions, etc, need to voluntary drop their prices for foreign visitors to see Australia as an appealing, affordable destination, and the the tourism industry to pick up again.

  4. Tracy permalink
    November 8, 2011 4:05 pm

    I don’t disagree that grocery prices in Australia are expensive, and am interested in the comparison, but am not sure this is very useful data. A couple of questions/comments:
    1. Were the prices from the same time of year, or when the produce was in season? Prices vary hugely for between in and out of season, and obviously seasons are opposite between here and the UK. This variation needs to be considered.
    2. Would be interesting to see prices for products that grow better in our climate (mangos rather than raspberries maybe?)
    3. Would be interesting (and perhaps a better comparison) to see prices for things like flour, sugar, milk, butter – less seasonal variation.

  5. Fran permalink
    November 8, 2011 4:12 pm

    I hope that these prices are adjusted for the seasonality of produce, eg are an annual average price…

  6. Robert Hadler permalink
    November 8, 2011 4:24 pm

    Bob

    There are lots of reasons why fresh produce prices and quality are different between locations in one country, let alone, between continents in different hemispheres.

    Without knowing the time when the survey was done, some simple answers include:

    Weather – you may have noticed that bananas have been higher priced in Australia because the crop was wiped out by Cyclone but it was not just bananas. Many fruit and vegetable prices were higher after the floods on the East Coast.

    Subsidies – unlike Euopean farmers, Australian farmers receive no subsidies such as the Common Agricuktural Policy which keep prices artificially low.

    Imports – there are virtually no imports of fresh produce into Australia – at Coles for example, 96 per cent of our fresh fruit and vegetables come from Australian farmers whereas there are much higher levels of cheap imports within Europe and from North Africa.

    I could go on but you should have got the message by now that there are very simple explanations for price differences and why simplistic comparisons such are the one you were given are meaningless.

    Anyone who has bothered to read real informant rather than spurious claims on the internet will understand that Australia has recorded overall food deflation in the last couple of years.

    A key driver of food deflation has been the investments by Coles in lower prices for our customers. This has been recognized by the ACCC and various Senate inquiries.

    Regards

    Robert Hadler
    General Manager
    corporate Affairs
    Coles Supermarkets

    • Jake permalink
      November 11, 2011 12:55 pm

      Coles and food deflation, you mean squeezing the farmers ?
      But you are correct, Aus squeezes her own farmers, while the EU/USA does it to their own and poorer countries, and they also have economies of scale.
      I think with the cost of fuel, CO2 emissions, financial crises etc, the EU is about to get a shock as prices rise to something more like Aus.
      I work about 6 months in EU/US/Asia (ie I am not a farmer so no axe to grind with Coles) and the only place with higher prices is Norway.

  7. November 8, 2011 4:24 pm

    Yes, interesting. You’d think there would have been mileage in trying to address this, but the government ran away from GroceryWatch at the first whiff of grapeshot.

    There’s also the price of international branded goods as I itemised here – which are also massively more expensive here – in part because we collude with intellectual property holders to hold our local market to ransom by banning parallel imports.

  8. anna corrigan permalink
    November 8, 2011 4:56 pm

    Would like to see meat and fish prices- I think these would balance up the final bill a bit

  9. November 8, 2011 5:59 pm

    When I first moved to California, of course I spent a lot of time comparing how much things cost here versus back home.

    Basically, everything is more expensive in Australia. Everything. Every. Thing. Finding something was double the price was not out of the ordinary at all.

    Cars are such an insane example I have to bring them up. How much does an entry level BMW 3 Series cost in Australia? MSRP is $60,000 (AUD). The same car in the U.S. is $34,600 (USD). There might be multiple contributing reasons, but at the end of the day, driving a BMW here is about as ordinary as driving a Commodore.

    The U.S. isn’t without its regressive tax policies that keep prices inflated (my favorite is the Chicken Tax – http://en.wikipedia.org/wiki/Chicken_tax), but given that the Aussie dollar is valued more highly than the U.S. dollar these days, there’s something more going on here to keep Australian prices inflated.

    With a good employer here providing me with healthcare, I can categorically say my standard of living is much higher than it was in Australia (I lose some things of sentimental value by being here, but I consider that calculation will always sum to zero given enough time in the new country).

  10. November 8, 2011 6:55 pm

    Land rationing, exchange rates and mining boom (the last two are connected, of course). Having some of the world’s most expensive housing/urban land does a lot to drive the price of everything up.

    • Bob Carr permalink
      November 8, 2011 7:52 pm

      The same analysis applies to London but more so.

    • November 8, 2011 8:50 pm

      Land rationing is worse in the UK. Not sure how exchange rates should affect the price of vegetables (or most vegetables anyway).

  11. TerjeP permalink
    November 8, 2011 8:58 pm

    I thought banana prices were due to Queensland cyclones coupled with import restrictions.

    I have heard that the Coles / Woolworths duopoly is in part maintained via councils zoning rules for supermarkets however I don’t know if this theory stacks up.

    Comparing the margins of Coles to Tesco would give some indication if you can get the data.

    • November 9, 2011 2:20 pm

      For all that people go on about a Coles/Woolworths Duopoly, I still tend to automatically think of Franklins’ when someone mentions the word “Supermarket”.

  12. scott permalink
    November 9, 2011 10:24 am

    I can report that every. thing. is cheaper in Canada, too. Not quite to the same degree as in California, but still….

  13. November 11, 2011 1:42 am

    Interesting graph. There are a huge number of things that can go into price differences. These include government policy, extent of competition, seasonal growth factors, geographical location and also natural disasters.

    I have taken the liberty of adding US prices onto the graph and posted it on my blog here:
    http://joshuajager.blogspot.com/2011/11/food-prices-aus-uk-us.html

    Please feel free to comment.

    • John Wilson permalink
      November 21, 2011 5:33 am

      Joshua, were your Kroger prices “before” or “after” the Kroger Card loyalty discount? “Before” prices are very high.

  14. Adrian Moerman permalink
    November 23, 2011 12:39 pm

    We spend five months a year in France and shop largely at Aldi which itself is about 25% cheaper than other retailers andd we find food costs nearly half that in Tasmania. UK is a little more expensive than France, but not much.

    The quality at Aldi is very good and comperable to the other outlets, but the range is small, two shampoos, half a dozen cereals, etc. Faster decision making, and no worries.

    Why are prices going up while the curency rises? In other countries currency rises lead to lower prices. Also when were Aus banana prices last $1 a kilo as it is in Europe?

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