Grocery prices rise 8.5% in 16 months as wage growth lags, Canstar data shows

Consumer research company Canstar compared the price of the same grocery items at Woolworths — Australia's largest supermarket chain — in March 2025 and July 2026. The total rose 8.5%, from $213.89 to $232.02. Canstar has previously compared Coles and Woolworths shops and found less than $2 difference between the two.

Basics such as milk and mince have increased in price, reflecting the impact of weather events on farmers. According to the Australian Bureau of Statistics, wage growth was 3.3% for the year to March this year.

"Wages are not catching up and, as a result, you're really feeling the pinch when you get to the check-out," said Lisa Asher, a retail academic researcher at the University of Sydney.

Canstar spokesperson Eden Radford said many people were changing how they shopped to save money. "They're doing things like bulk buying, going frozen where they can, shopping around, and even doing things like replacing meat with things like lentils," Ms Radford said.

Shoppers are reporting significant increases. Chris Jackson said feeding a family of four had gone from a $300 shop per week last year to what feels like $400 plus now. "I am really conscious of making sure we are feeding the kids the right things, so we're kind of forced into buying certain things," he said.

Roseanne Browning said the cost of buying food had "skyrocketed". "I buy less, I don't buy chocolate, I don't buy confectionery."

Why This Matters

Australian households are seeing grocery bills outpace wage growth, squeezing household budgets already under pressure from other cost-of-living rises.
The 8.5% increase over 16 months is a significant jump for a core expense, and the warning that Iran war impacts are yet to be fully felt suggests further pain ahead.
Shoppers are adapting by changing their buying habits — switching to frozen, bulk buying, and reducing meat consumption — which may reshape consumer demand and retail strategies.

Background

Australia's grocery market is dominated by two major chains, Coles and Woolworths, which together account for the vast majority of supermarket sales. Previous Canstar comparisons have shown negligible price differences between the two. The current price rises come amid a period of high inflation globally, though the Australian Bureau of Statistics has reported wage growth trailing price increases. Weather events have affected agricultural production, pushing up prices for staples like milk and mince. The Iran war, referenced in the article, adds an additional layer of global supply chain uncertainty.

Key Perspectives

Shoppers: Consumers like Chris Jackson and Roseanne Browning report feeling the strain, with some cutting back on discretionary items and others changing their shopping patterns to include more frozen food and meat alternatives. Retailers: Supermarkets are passing on higher costs from suppliers, who in turn are affected by weather events and global pressures. The narrow price gap between Coles and Woolworths limits competitive relief for shoppers. Farmers and suppliers: Weather events have driven up the cost of basics like milk and mince, contributing to the overall increase. The full impact of the Iran war on imported goods and global commodity prices is still to come.

What to Watch

Further price increases as the Iran war's effects on global food supply chains materialise.
Whether wage growth picks up to match inflation, or whether the gap widens.
Consumer behaviour shifts — if bulk buying and switching to frozen become lasting trends, it could reshape supermarket stocking and pricing strategies.

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