Aldi dominates again as Coles and Woolworths fight for second in price-war

Aldi has once again beaten Coles and Woolworths in the second government-funded quarterly supermarket report. Consumer group CHOICE sent mystery shoppers to 104 supermarkets to compare prices and Aldi was the "clear leader on value for money" with a $50.79 basket.

Coles managed to edge out competitor Woolworths, with the 14 everyday grocery items coming to $66.22 and $68.37, respectively. The basket included items like tea, bread, milk and sugar.

CHOICE said that based on prices including specials, and compared to the first wave of research in March, Aldi and Coles' baskets had dropped in price. Meanwhile, Woolworths' basket increased.

"When we compare our 14 items including special prices we see that the overall cost of the basket at Woolworths increased by $3.44 between March and June, and at Coles it dropped by $2.30," the report found.

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Here's a quick breakdown of the first and second results:

Aldi: $50.79 from $51.51 in March

Coles: $66.22 from $68.52 in March

Woolworths: $68.37 from $64.93 in March

The two big hitters dominate Australia's grocery market with a collective 65 per cent share.

And surprisingly, despite delivering consistently lower prices, Aldi has still only managed to corner 10 per cent.

That's about five million shoppers in its 590 stores a month.

However, a Yahoo Finance poll of more than 2,200 people when the results were released in June found the majority shopped at Aldi (55 per cent).

This was followed by Woolworths and Coles, with 21 per cent and 19 per cent, respectively.

Has your stance changed?

The results come just days after the Australian Competition and Consumer Commission (ACCC) launched legal action against Coles and Woolworths for alleged breaches of consumer law.

The ACCC has alleged prices were temporarily increased for short periods before being placed on "Prices Dropped" and "Down Down" promotions.

Freshly-minted Coles CEO Amanda Bardwell was confronted by an enraged shopper in-store over the alleged price-gouging.

Which supermarket is cheaper?

CHOICE said the two major supermarkets were "very closely matched" earlier in the year, which now had a further division.

"While just $0.75 separated the prices of our baskets without specials when we surveyed in March, the difference between the two stores in June increased to $1.21, with Woolworths again the cheaper of the two," the report read.

"But taking into account special prices, we found Coles was cheaper than Woolworths by $2.15. In March, it was Woolies that cost less than Coles by $3.59."

The consumer advocacy group said there were noticeable differences when special were involved and urged Australians to shop around to take advantage of competitive pricing.

“Buying items on special can make a difference to overall grocery costs, and reinforces the benefits of shopping around where possible," CHOICE CEO Ashley de Silva said.

"A discount on tea bags at Coles during our survey period was a major influence on the results of this survey."

Here's the difference without specials:

Aldi: $51.51

Woolworths: $68.58

Coles: $69.33

A sample size for IGA was too small to be included last time around, but the Metcash-owned franchises were found to have the most expensive basket this time around.

Including specials, the IGA basket came in at $78.95.

CHOICE said the franchises across 27 locations had "greatly varied" prices due to variation in store sizes.

"Comparing prices without specials at IGA stores was a challenge," the report stated.

"Due to inconsistent signage, our mystery shoppers were frequently unaware a product was on special until it was marked as such on their receipt, meaning there was no 'regular price' to record."

CHOICE found Aldi shoppers got the best prices in NSW and ACT, while Woolworths and Coles consumers in WA paid more for the same basket of goods than the other states and territories.

What do the supermarkets say?

A spokesperson for Woolworths said the average prices fell in the first price of the year and encouraged shoppers to find the best value by using unit pricing.

"We remain focussed on delivering value for customers and continue to work harder to help them easily find that value when shopping our stores or online," the spokesperson told Yahoo Finance.

"We’re also continuing to expand and improve our own brand range of products, which are on average 30 per cent cheaper than the mainstream national brands that CHOICE has included in this basket."

Yahoo Finance contacted Coles for comment.

What groceries were in the 'average Aussie's shopping basket'?

The comparisons were done on a basket of 14 items, including national brands and comparable supermarket or budget-brands. They included specials.

This is the list:

• Apples

• Carrots

• Weet-Bix

• Sliced white bread

• Flour

• Penne

• White sugar

• Tea bags

• Tinned diced tomatoes

• Block of tasty cheese

• Full-cream dairy milk

• Frozen peas

• Beef mince

• Butter

Why is Aldi the 'best value'?

Aldi stocks fewer items, about 1800 products compared to the 25,000 products sold by its big competitors.

Last month, Aldi was crowned Australia's best supermarket for the seventh time in a row by Canstar Blue.

There's no loyalty program and the German supermarket doesn't try to compete in the online shopping sphere, instead claiming the focus is on all-year low prices and Special Buys.

Aldi has even claimed to have saved Australians who don't even shop with them more than $7.8 billion since arriving here in 2000 simply by pricing items so low major supermarkets have no choice but to drop theirs to compete.

Aldi Australia's managing director Jordan Lack threw down a challenge for shoppers.

"Our everyday low pricing model means customers have certainty when they walk through our doors," he told Yahoo Finance.

"We saved our customers $3.4 billion last year alone, so for Australians that haven't made the switch ... and are looking to reduce their grocery bill, we say give ALDI a go.”