A new Goldman Sachs report estimates that Amazon is the second-largest online grocery retailer in Australia.
However, popular supermarkets like Coles and Woolworths are still holding on to the majority of grocery sales. The pair reportedly control about 67% of Australia’s grocery market.
Amazon is directly challenging established grocery chains like Woolworths, Coles, Bunnings, and Kmart.
According to Goldman Sachs, Woolworths still has the largest online retail sales in Australia, but Amazon is not too far behind. Coles has moved down to be the third largest online retailer by sales.
Amazon says groceries are a massive ‘growth opportunity’
Speaking to The Australian Financial Review, Amazon’s country manager Janet Menzies says while the majority of customers shop at Woolworths and Coles every week, groceries have become a significant “growth opportunity for the business.”
Amazon is focusing on speedy deliveries because most of the grocery items customers deliver are needed immediately.
To make this possible, the retailer has built seven fulfillment centers in strategic places. From there, ordered items go to a logistics center before being sorted into a delivery route and delivered.
Menzies told AFR that by 2026, it wants to have same-day delivery in every major city in Australia. “A lot of people shopping with us today didn’t shop with us 12 months ago.”
Industry reaction: Pricing in Australia
“For many Australians, Amazon is the go-to for household staples like toilet paper, dishwashing liquid, and pantry items. Personally, I’ve found their subscription services to be a game-changer. I use them regularly for products like kitchen paper towels and dishwasher tablets—saving time, money, and effort,” says Benjamin Christie, founder and president of Gourmet Ads.
Christie believes there are a few reasons why Amazon is thriving in the Australian market.
- Aggressive pricing: It’s selling items like pasta and tinned goods at a loss to attract shoppers
- Speedy delivery: Investments in robotic fulfillment centers.
- Offering subscriptions: Amazon’s grocery business thrives on subscriptions for everyday essentials
- Convenience: Shopping from your couch and getting next-day delivery
NOW READ: Amazon’s new strategy to capture the grocery market
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.
