Supermarkets dominate the fresh bread market but Bakers Delight captures an out-sized share of the dollars spent
Australia’s $2.5 billion fresh bread market is dominated by the two supermarket giants Woolworths Group and Coles Group who represent a combined 60.4% of the total dollars spent in the fresh bread market, according to the latest Roy Morgan results in the year to December 2022.
The dominance of the two major supermarkets has grown in recent years although the overall size of the fresh bread market is lower now than it was five years ago – now at $2.5 billion compared to $2.9 billion in mid-2018. Roy Morgan covered the state of the fresh bread market in detail in 2018 when Coles and Woolies had a combined share of just over half – 51.9%.
The latest Roy Morgan figures show that Woolworths has retained its title as Australia’s largest retailer of fresh bread capturing a market-leading 30.6% of the spending in the fresh bread market, and just ahead of Coles Group on 29.8%.
In total, supermarkets now comprise over three-quarters (78.2%) of the entire fresh bread market with the remaining 21.8% split between specialty bread shops including Bakers Delight, Brumby’s Bakery, other bread shops, and between delicatessens, milk bars, convenience stores and other stores.
Over the last eight years the three largest supermarkets have been the stand-out performers in the fresh bread market. Coles Group has grown its market share by an impressive 7.4% points to 29.8%, Woolworths Group is up 4.4% points to 30.6% and Aldi is up 1.4% points to 6.8%.
The two major supermarkets have clearly the largest customer penetration of Australians who shop for fresh bread with 39.1% of fresh bread buyers shopping at Woolworths in an average week and almost as many, 37.6%, shopping at Coles well ahead of Aldi (10.1%), Bakers Delight (8%) and IGA (6.3%).
Australian fresh bread market share ($) vs. customer penetration
Source: Roy Morgan Single Source Australia, January – December 2022, n=37,288.
Base: Last 7-day fresh bread purchasers aged 14+ weighted to Australian households.
Although Bakers Delight has lower customer penetration of fresh bread buyers (8.0%) than third placed supermarket Aldi (10.1%), the specialty fresh bread store has a significantly higher share of the overall dollars spent in the market: Bakers Delight (9.3%) cf. Aldi (6.8%).
This result shows that average spending on fresh bread at Bakers Delight is significantly higher than at its supermarket rivals including Coles Group, Woolworths Group, Aldi and IGA.
In-depth Roy Morgan research into Australia’s grocery market shows that the overall market is valued at over $116 billion per annum. For further analysis, including the shares of the major supermarkets within the overall fresh food market, purchase the Roy Morgan Supermarket & Fresh Food Currency Report.
Michele Levine, CEO, Roy Morgan, says Australia’s fresh bread market is increasingly dominated by the supermarket giants Woolworth and Coles, even as the overall size of the market has shrunk by around $400 million since 2018:
“The dominance of Australia’s two supermarket giants Woolworths and Coles is well known with the two now capturing over 60% of the spending on fresh bread in the Australian market – up from 48.6% in 2014 – an increase of over 10% points in under a decade.
“However, although the two major supermarkets have grown their share of the market – the overall market has shrunk in recent years and is now valued at around $2.5 billion – compared to around $2.9 billion in mid-2018.
“Despite the smaller size of the overall market, both Coles and Woolies have grown their share and also the total dollars spent on fresh bread at their stores. This growth has come at the expense of most of their smaller rivals including specialty bread stores such as Bakers Delight and Brumby’s Bakery, and other stores including delicatessens and convenience stores.
“This growth was ‘super-charged’ during the COVID-19 pandemic as Australians flocked to the most trusted brands in the Australian market. Woolworths and Coles were rated as the two most trusted brands in Roy Morgan’s Net Trust rankings for 2022 ahead of other large retailers including Bunnings, Kmart, Myer and Big W.
“Although the two large supermarkets dominate the market there are several other brands performing well and capturing a slice of the 40% of the fresh bread spending outside of the ‘Big 2’. Specialty bread outlet Bakers Delight captures 9.3% of the spending on fresh bread and is ahead of smaller supermarkets Aldi on 6.8% and IGA on 5.7%.
“Bakers Delight is also the only major brand in the fresh bread market that captures a higher share of the total spending than its customer penetration would suggest – only 8% of Australians who buy fresh bread in an average week shop at Bakers Delight.
“The higher than average spend on fresh bread means Bakers Delight trails only the ‘Big 2’ and shows that a well-run business can take on, and beat, more highly capitalised competitors. Underlying the success of Bakers Delight in the ultra-competitive fresh bread market is a well-defined strategy offering great customer service and exceling at their core competency.
“To stay ahead of the game and be fully prepared for the competitive pressures in a fast changing industry the extensive analysis available in the Roy Morgan Supermarket & Fresh Food Currency Reports which covers all food retailers, including products purchased and dollars spent is essential. The combination of the large annual sample collected over more than a decade enables a unique in-depth trend analysis of this very significant market.”
These results are from the Roy Morgan Single Source survey of over 60,000 people per annum, including over 35,000 grocery buyers and covered in the latest Roy Morgan Supermarket Grocery Currency Reports.
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Margin of Error
The margin of error to be allowed for in any estimate depends mainly on the number of interviews on which it is based. Margin of error gives indications of the likely range within which estimates would be 95% likely to fall, expressed as the number of percentage points above or below the actual estimate. Allowance for design effects (such as stratification and weighting) should be made as appropriate.
| Sample Size | Percentage Estimate |
| 40% – 60% | 25% or 75% | 10% or 90% | 5% or 95% | |
| 1,000 | ±3.0 | ±2.7 | ±1.9 | ±1.3 |
| 5,000 | ±1.4 | ±1.2 | ±0.8 | ±0.6 |
| 7,500 | ±1.1 | ±1.0 | ±0.7 | ±0.5 |
| 10,000 | ±1.0 | ±0.9 | ±0.6 | ±0.4 |
| 20,000 | ±0.7 | ±0.6 | ±0.4 | ±0.3 |
| 50,000 | ±0.4 | ±0.4 | ±0.3 | ±0.2 |
