Australia’s cheapest major supermarket has been named, as grocery prices continue to come under the microscope after years of price gouging.

Aldi was the “clear leader in value for money”, consumer advocacy group Choice found in its first quarterly, government-funded report.

A basket of 14 products bought by mystery shoppers from Aldi cost $51.51 – about 25 per cent cheaper than an identical haul from Coles or Woolworths.

But shopping at IGA was found to be “substantially” more costly than at Coles and Woolworths in locations where Aldi did not have a presence.

Shoppers in capital cities and certain states and territories were also left slightly more out of pocket than others.

“Grocery prices at Coles and Woolworths are very closely matched, with only 75 cents separating the prices of our basket of 14 items without specials,” Choice CEO Ashley de Silva said.

Source: Choice

Assistant Minister for Competition Andrew Leigh said Choice’s research would help inform consumers so they could get cheaper prices at the checkout.

“This is about making our supermarkets as competitive as they can be so Australians get the best prices possible,” he said.

“Australians are under cost-of-living pressure, and we know that a lot of that pressure is piled on at the cash register.”

Choice was given $1.1 million in government funding to conduct research into supermarket prices for three years after a Senate probe found the answer to whether there is price gouging in the supermarket sector was a “resounding yes”.

“While many of those ways appear minor on the surface – a dollar here, a fraction of a percentage there – they add up incrementally,” the select committee on supermarket prices said in its report.

“Taken as a whole, those individual activities create a picture of an industry driven by profits at the expense of consumers, who have a right to affordable and nutritious food.”

Although supermarkets have largely blamed higher shelf prices on rising costs, Coles and Woolworths each raked in more than $1 billion in profits last year.

Meanwhile, producers were left struggling with inflation, and consumers increasingly resorted to dumpster diving and stealing.

Supermarket prices investigation

For its research in supermarket pricing, Choice sent mystery shoppers to 81 regional and metropolitan supermarkets across 27 locations around the country in March to record prices of 14 grocery items.

These items were:

• 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.

The average total cost of these items across the supermarkets was $63.74.

Shopping at Aldi was found to about $17 cheaper than Coles and Woolworths, while a Woolworths basket turned out to be cheaper than Coles by $3.59 when specials were taken into account.

Aldi hailed its win on Thursday.

“We take our role as Australia’s most affordable supermarket seriously and every day, every element of our business is oriented around how we can continue to deliver on our ambition to provide high quality groceries at the lowest possible price,” Aldi Australian managing director Jordan Lack said.

IGA groceries costing more

IGA operates a different model than the other major supermarkets, with stock and prices varying between its independently-owned stores.

Despite this, Choice assessed IGA stores’ prices in Tasmania and the Northern Territory when there was no Aldi store in the local area.

Four items from the list (cheese, beef mince, frozen peas and butter) were not available at the IGA stores at the time of the survey.

The cost of shopping at IGA was found to be substantially higher than at Coles and Woolworths.

In the Northern Territory, the 10 items cost $46.75 at IGA compared to about $33 at the other supermarkets.