Krechelle Carter, a busy mother of six living in Adelaide’s southern suburbs, knows the value of every dollar. To stretch her family’s budget further, she turned to Amazon, the online retail giant best known for books and electronics, for essentials like toilet paper and dishwashing liquid. What she found was surprising: competitive pricing on everyday items and lightning-fast delivery.
“For household basics, the prices were surprisingly good,” Carter explains. “My next concern was delivery—how quickly could we get what we needed? It turned out that within 24 hours, most of our essentials were at the door. And we’re in Adelaide!” Today, Carter spends about $200 monthly on Amazon, in addition to $400 on weekly groceries from major supermarkets.
Families like the Carters are part of a growing trend, using Amazon as a cost-effective option for household staples. This shift hasn’t gone unnoticed by supermarket giants Woolworths and Coles, which continue to dominate the Australian grocery market but now point to Amazon as a major competitor in the space.
The Rise of Amazon in Australia
Analysts at Goldman Sachs rank Amazon as Australia’s second-largest online retailer, trailing only Woolworths. The US-based company’s rapid growth is intensifying debates around market competition and the dominance of traditional supermarket chains.
Coles CEO Leah Weckert notes that Amazon sometimes sells groceries—like pasta, rice, and canned goods—at a loss to attract shoppers. “It’s a clear sign of increasing competition,” she says. Weckert highlights Amazon’s investment in cutting-edge robotic facilities in Melbourne and Sydney, which enable delivery times as short as two hours. “We expect their presence will only grow stronger.”
From its beginnings as an online bookshop in Jeff Bezos’ Seattle garage in 1994, Amazon has become one of the world’s largest companies, offering everything from cloud computing to streaming services. Its grocery ventures in the US began in 2007 and expanded significantly with the acquisition of Whole Foods Market in 2017. Yet even in the US, Amazon holds only 3% of the grocery market compared to Walmart’s commanding 30%.
In Australia, however, Amazon is accelerating its investments. Since 2011, the company has poured $11 billion into its operations, including $5 billion since 2022, with plans to spend another $1.6 billion by 2026. This growth strategy has seen Amazon expand its fulfilment network, including seven centres for storage, packing, and shipping, supported by logistics hubs and local delivery networks.
A Growing Share of the Grocery Market
Amazon’s foray into Australian groceries is still modest but gaining momentum. Its grocery sales—covering items like snacks, beauty products, and cereals—are expected to hit $1.3 billion this year, representing about 1% of total supermarket sales.
Janet Menzies, Amazon’s country manager, views groceries as a major growth opportunity. “Most of our customers still shop at Woolworths or Coles, but we’re seeing more people trying our grocery offerings,” she says. Speed and convenience, she adds, are key drivers. “When you’re out of cat litter or other essentials, having it delivered quickly is a real benefit.”
By 2026, Amazon aims to offer same-day delivery in every major Australian city, making online grocery shopping even more accessible. As customers grow more comfortable buying food online, Amazon expects its market share to rise.
Online Grocery Shopping on the Rise
Although online grocery shopping remains relatively underdeveloped in Australia, there is significant room for growth. Currently, online sales account for just 7% of grocery spending, compared to 25% in the US and UK, and 35% in China. Woolworths and Coles have reported strong growth in online sales, with increases of over 20% in the first quarter of the financial year.
Amazon’s growing presence is also drawing the attention of regulators. The Australian Competition and Consumer Commission (ACCC) is investigating supermarket competition, with Amazon’s impact forming part of the discussion. Woolworths, in particular, has highlighted Amazon’s offerings as evidence of strong competition in the market, noting that the online retailer stocks about 40% of Woolworths’ product range in groceries, household, and personal care items.
Changing Habits and Saving Money
For shoppers like Carter, Amazon has changed how groceries are bought and stored. She’s even set up a second pantry to stock up on deals. “By buying in bulk and planning ahead, I’m saving $70 a month. It’s absolutely worth it,” she says.
Despite the challenges of breaking into the Australian grocery market, Amazon’s investments and focus on customer convenience are steadily paying off. With competition heating up, traditional supermarkets face growing pressure to innovate and deliver value. For Australian shoppers, this can only mean more choice and better prices in the years ahead.
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