A survey run by financial analysts at Citi has suggested Coles is taking market share from Woolworths, but a leading expert says the difference between the chains is “immaterial”.

Citi data this week found that Coles is nudging ahead of Woolworths on price and customers’ perception of value, just weeks after sales data from the supermarkets showed a divide.

The shift away from Woolworths to Coles was bigger among the 14 to 44 age cohort, Citi said.

Like-for-like sales growth at Woolworths rose 5.6 per cent between 2023 and 2024, compared to 6.2 per cent at Coles, suggesting the latter edged slightly ahead over the past financial year.

But University of Sydney retail expert Lisa Asher says the difference is insignificant and actually reflects the fact that Woolworths has a much larger footprint than Coles, with higher total sales.

“Those growth figures are immaterial. It is a bigger number, but Coles revenue is $39 billion versus Woolworths at $50.74 billion,” Asher explained.

“Coles have a lot fewer stores than Woolworths, which has a very strong expansion strategy.”

Both major supermarket chains have come under significant pressure over the past few years as shopper anger about high prices has affected their reputation and driven people to Aldi.

Citi’s analysis suggested the German supermarket chain is also taking value from the majors.

Woolworths has copped the brunt of the backlash as the nation’s largest supermarket chain, something that outgoing Woolies Group boss Brad Banducci acknowledged to investors.

But a perception among Australians that Coles provides superior value for money as opposed to Woolies also persists and has long been a bugbear of investor analysts that price Woolworths’ shares.

Why there is a perception gap

Asher explained that while there is no substantial difference in prices between Coles and Woolworths there is divergent marketing between the two chains that drives perceptions.

“When you think about the messaging that we get from the retailers in terms of what they represent; Woolworths are the ‘everyday fresh food people’,” Asher said.

“What message comes to mind with Coles? ‘Down Down, prices are down‘.”

Asher said “perception is reality” for many shoppers, with the gap showing the power of advertising but also differences in how each supermarket looks to position itself in the market.

Woolworths has a much larger range than Coles and Aldi, so while it competes with them on prices for some items, it also has many other products from brands that carry higher prices.

“From an assortment perspective, Coles have less SKUs than Woolworths,” Asher said.

“Coles had $13 billion in sales from their store (own label) brand [last financial year], so they’re offering a higher proportion of products under their own brand.

“So the perception is that Woolworths have got a lot more options, and those options have varying prices, whereas when you go to Coles, there are less brands because there’s more of their own store brands.”

Citi’s data showed that Woolworths extended its lead as most preferred supermarket by 3 percentage points in the most recent period, even as perceptions of value shifted towards Coles.