Who's winning the deli war?

The Australian delicatessen market turns over $4.7bn annually with Coles and Woolworths taking nearly 80% of the spoils. Woolworths is slightly ahead of Coles in market share but a recent Roy Morgan survey has shown that the gap between the two supermarkets is closing.

In the 12 months to March 2015, 6.7 million Australian grocery buyers spent around $91m in total on delicatessen items in an average seven days. This is up from 6.4 million weekly shoppers (and $73m spent) four years ago.

Over the last five years, Roy Morgan Research has surveyed over 72,000 grocery buyers (14+), half of whom had made a recent purchase from a deli aisle or counter.

43.0% of deli shoppers are buying at least some of their week’s supply of deli goods from Woolworths (down from 44.1% in 2011). While Coles increased its share from 31.5% in 2011 to 36.7% in the latest survey.

840,000 grocery buyers bought deli items at an IGA in the last week, representing 12.5% of deli shoppers (down from 13.4% in 2011), and 540,000 shopped at a dedicated, stand-alone deli (8.1%, down from 9.0%).

% of deli shoppers who bought deli items at a store. Source: Roy Morgan Single Source (Australia), April 2010 – March 2015, average annual sample n = 7277 Australians 14+ who purchased delicatessen items in the last seven days. Results may add up to more or less than 100% as respondents may select multiple places, including others not shown.

Andrew Price, general manager consumer products, Roy Morgan Research, said: “Over the last five years, only Coles has made any headway in the all-important delicatessen market. The proportion of grocery buyers who buy deli goods in an average week has remained steady at around 50% since 2011 — which means competition, not market growth, is the only way to gain shoppers. 

“The deli is also a vital battleground for Coles and Woolworths as it’s an arena where no-frills discount players like Aldi (and soon Lidi) — with minimal staff and no deli counter — don’t compete in the same way.

“Mid-life families are among the most likely to buy deli items during the week. These are also often the grocery buyers filling their trolleys with goods right across the store — clearly a valuable target market, and a reminder of the potential importance of the deli counter as a driver to broader retail spend.”