Australian grocery market revolution continues

Overseas competitors continue to eat into the dominance of the Australian grocery market traditionally dominated by the duopoly of the Woolworths and Coles chains.

The annual 90 billion Australian dollar (66 billion U.S. dollars) sector is increasingly being taken by privately owned German super-discount chain Aldi and the independent IGA group, according to a report released on Wednesday.

Woolworths and Coles have long countered their rivals by claiming superior quality of produce, but a survey of shoppers by global financial services company UBS put both giants at the bottom of the quality list.

The survey found sales are expected to slow at Woolworths -- which recently shook up its executive team after declining market share and profits -- at faster rate than its rivals.

"There continues to be strong support from shoppers for a high- quality fresh offering, with our respondents ranking Aldi best, then IGA (independent chains), Coles and Woolworths last," the UBS report stated.

It also detailed how 40 percent of Coles and Woolworths customers were prepared to abandon their loyalty to them.