Consumer group Choice is standing by its reporting on grocery prices after an analyst at JPMorgan questioned the veracity of their government-funded supermarket surveys.

A JPMorgan report on grocery price differences from October identified an 8 to 9 per cent “price premium” from Coles and Woolworths to Aldi.

That is much less than the 30 per cent gap on a basket of groceries identified by Choice in its September-quarter supermarket survey under a transparency program funded by taxpayers.

Bryan Raymond, the JPMorgan analyst behind the report, was quoted in the AFR on Monday suggesting that the Choice analysis has several shortcomings, including that home brand and branded items are mixed in their reporting.

But Choice said in a statement that it stands by the reporting.

“Prices were recorded via individual mystery shoppers who visited 104 stores across the country,” a spokesperson for the consumer group said.

“Choice wanted to accurately reflect the way people shop in our survey, which means our basket for each store included a mix of house brand and national brands, and was neither the cheapest nor the most expensive it could be.

“As we will track the same 14 products used in our basket in the future, we are unable to list the exact products we compare, as doing so would compromise the integrity of the study.”

Choice received $1.4 million in federal funding earlier this year under an Albanese government plan to improve the transparency of grocery prices and make it easier for shoppers to tell where the cheapest deals are.

Why Choice stands behind reports

The Choice supermarket survey and JPMorgan’s reporting have reached differing conclusions because their methodologies and aims are distinct.

The JPMorgan report seeks to canvass price differences between the major supermarkets and Aldi across a wide range of products over time to help analysts and investors understand changes in the market positioning of each business.

“Relative pricing can be volatile with promotional timing, however, we expected the supermarkets to continue becoming more value-conscious given the scrutiny on the Down Down and Prices Dropped programs,” JPMorgan said in its report.

“Supermarkets are attempting to manage value perception in light of increased regulatory scrutiny and negative customer sentiment.”

Choice’s survey, meanwhile, is geared towards providing consumers with an indication of where they might be able to find the cheapest groceries on a typical basket of goods.

“The 14 items in our basket are “chosen based on a range of factors such as weight, ingredient lists, country of origin and packaging similarities to ensure the items were like-for-like,” a Choice spokesperson said.

Supermarket inquiry

Coles and Woolworths have suffered significant public backlash over high grocery bills over the past year and have lost their place among the nation’s most trusted brands amid the fallout of ACCC legal action and several federal government crackdowns.

The supermarkets this week will front up to an ACCC inquiry investigating why consumers are paying high grocery prices and whether supermarket competition is lacklustre.

Aldi appeared on Monday, saying that while it has enjoyed a bounce with shoppers recently, it is not necessarily looking to open a flurry of new stores, with an estimated 85 per cent of Australians already living within 20 minutes of an Aldi.

Aldi’s national buying managing director Jordan Lack said the type of customer that visits Aldi has also changed over the years.

Although Aldi was once more of a niche catering to bargain hunters, shoppers at the supermarket now are more mainstream, he said.

“The Aldi customer is not too dissimilar from the Coles or Woolworths customer,” Lack said.