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Health & Wellbeing
Anthony Albanese suggests Arab supermarket come to Australia to compete with Coles, Woolworths
In a surprise move, the PM has urged a Middle East retail giant to enter Australia’s $120 billion supermarket sector dominated by Woolworths and Coles.
Benedict Brook
@BenedictBrook
September 30, 2025 – 6:15AM
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Anthony Albanese has suggested to the head of an Arab supermarket chain that it enter Australia in order to increase competition against grocery giants Woolworths and Coles.
But other international supermarket chains have surveyed Australia in the past – and decided against entering.
The prime minister was in the United Arab Emirates on a brief stop after spending a week in the United States and United Kingdom.
On Wednesday, the Australia-UAE Comprehensive Economic Partnership Agreement comes into effect which will see tariffs cut on almost all exports to the UAE.
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Mr Albanese stopped by a branch of the Lulu supermarket chain in Abu Dhabi which has a special Australian section, complete with Tim Tams, Vegemite, and Aussie beef.
Lulu has more than 250 stores across the Middle East and is one of the region’s largest grocers.
The PM said he had spoken to Lulu Chairman MA Yussuf Ali about setting up shop in Australia.
“I have encouraged him to come to Australia as well, we need more competition in the Australian supermarket sector, and we have had a little discussion about that.”
“This is a significant company,” he said of Lulu.
Prime Minster Anthony Albanese spruiking Australian produce in the UAE at a Lulu supermarket. Picture: Instagram
“They are the largest throughout the Middle East. It is big enough to have direct relations with (Australian) producers, whether they be mango producers, the orange producers (or) the meat.
“Aldi (has) come to Australia, and this is a significant player that has an engagement with Australia, and of course I want to see more competition.”
According to the Australian Consumer and Competition Commission (ACCC) Woolworths has a 33 per cent of the $120 billion supermarket sector with Coles on 25 per cent meaning nearly 60 per cent of total sales come from the top two.
Aldi is on 8 per cent after overtaking IGA which now has a 6 per cent market share. Although independent supermarkets, butchers and greengrocers make up a substantial 29 per cent of Australia’s shopping baskets.
As a comparison, in the UK the largest supermarket chain Tesco has a 29 per cent market share and three chains make up 60 per cent of the market.
Albanese has suggested Lulu could take on Coles and Woolworths. (Photo by Asanka Ratnayake/Getty Images)
Entering Australia a challenge
Some major international players, such as the US’ Costco and obviously Aldi, have successfully opened in Australia providing an alternative.
However, it’s notable that a number of other firms have run the numbers and deemed it simply not worth it.
The most high profile was Germany’s Kaufland chain which had reportedly sunk $500 million into opening its hypermarkets in Australia, and had half built a distribution centre and employed 200 staff, when it spectacularly pulled the plug in 2000.
Artist impression of what the Toowoomba Kaufland store would have looked like – before the German giant pulled out of list plans for Australia.
Retail watchers said it may have become clear to Kaufland that succeeding in Australia would have required massive investment and taken up to a decade. Unlike Aldi, it didn’t have the patience or bottomless pockets.
“The Australian market by world standards is small and we’re a massive piece of land with a small population,” Ritchies Supermarkets CEO Fred Harrison told news.com.au at the time.
“Australia is a great country but it’s an expensive one and they might have underestimated the logistics”.
Other chains that have broken into global markets, like Lidl for instance, have so far failed to open in Australia.
Kaufland’s Australian exit was so sudden it had already started building some of its sites. Picture: Tom Huntley
A UAE supermarket chain, with an unknown brand, might find the same hurdles to opening in Australia.
A report into supermarket competition by the ACCC, released earlier this year, said there was a “limited incentive” for Coles and Woolworths to compete on price. But grocery prices were not “excessive” and the two major players did not have a duopoly due to a large independent sector and the likes of Aldi and IGA.
The major supermarket chains have insisted that Aldi has led to lower prices particularly on private label lines which make up an increasing part of the store.
While both Coles and Woolworths, and Aldi for that matter, have large profits, their profit margins are relatively small.
Coles banks just 2.57 per cent of the cost of every item sold as profit while Woolworths is at 2.7 per cent – which is not dissimilar to supermarkets in the UK and US.
Much of the companies’ large profits is due to the sheer volume of products sold.
Read related topics:Anthony AlbaneseWoolworths
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