Woolworths’ Price Decline Claims: Fact or Fiction?

Woolworths, Australia's largest supermarket chain, has made a bold claim: eight consecutive quarters of year-on-year price declines. But is this claim truly reflective of the reality faced by Australian shoppers?

The average grocery bill has been on the rise, with data from Savings.com.au indicating a significant increase in the cost of a typical Woolworths shopping list over the past two years.

A closer examination of individual product prices reveals a similar trend. Popular items like Weet-Bix, Coca-Cola, Vegemite, beef mince, and free-range eggs have all seen notable price hikes, some as high as 30%.

The Australian Bureau of Statistics (ABS) also paints a different picture. The food and non-alcoholic drink category, a significant contributor to annual inflation, saw a 3.4% increase in 2025, according to the ABS. Interestingly, the ABS relies on Woolworths' scan data for its calculations, creating a discrepancy with the supermarket's claims.

The key to understanding Woolworths' claim lies in their methodology. They use the Fisher method, which tracks the average price of items sold, not the shelf price. This method can show falling prices when consumers switch to cheaper alternatives, masking the overall price increase.

Graham Cooke, a consumer research expert, likens this to a hotel claiming lower average costs because guests opt for budget rooms instead of suites. Woolworths' method accounts for consumer choice, so if a pricier item sees a price hike and consumers switch to a cheaper alternative, the average price paid drops.

This statistical model has come under scrutiny, especially as both Woolworths and Coles face allegations of offering 'illusory' price discounts. With profit margins rising during an inflationary period, the supermarkets' pricing strategies are attracting political attention.

In essence, Woolworths' claim of price declines may not reflect the actual shopping experience of Australian families. As shoppers navigate a tight budget, the reality of rising grocery costs becomes increasingly apparent.