Distribution points in Australia are centralised. All major supermarket chains and warehouse/wholesale clubs operate their own network of national and regional distribution centers.

Banner groups are used by a large number of independent retailers to improve the buying, advertising, and competitive power of smaller grocery and convenience stores. Under banner groups, retailers are able to negotiate better prices, coordinate marketing campaigns, and collaborate to establish new programs that benefit consumers.

According to the estimates of the Australian Bureau of Statistics, food retailing fell 0.2% in August 2020, in seasonally adjusted terms. However, Australian turnover in retail sector rose 7.1% in August 2020 compared with August 2019.

 By industry subgroup, the seasonally adjusted estimate fell 2.9% for Liquor retailing, but it rose 0.1% for Supermarket and grocery stores and 0.5% for Other specialised food retailing. Health, wellness, and the environment continue to be major focuses among Australian consumers.

Australians tend to choose modern grocery retailers over traditional ones due to the more comprehensive range of products than traditional retailers. Furthermore, the scale of these modern grocery retailers allows them to offer better prices, further encouraging consumers to choose this channel.

The Supermarkets and Grocery Stores industry is one of the most fiercely competitive industries in Australia. The cause is to be traced back to development of discount operators such as ALDI and Costco. The rapid expansion of ALDI has significantly altered the industry's operating landscape, with the popularity of its low-cost private-label products underpinning strong growth. Large foreign companies, such as Amazon’s grocery division, AmazonFresh, and the Germany-based Schwarz Group’s supermarket brands, Lidl and Kaufland, will further intensify competition in the near future. The rise of discounts has forced the two established industry giants, Woolworths and Coles, to cut prices and expand their private-label product ranges in response. Smaller supermarket chains have struggled to compete in an ever more price-competitive sector.

Another defining feature of Australia’s supermarket and grocery industry is that it is highly concentrated, with the four largest operators accounting for almost 80 per cent of total industry revenue. Coles and Woolworths account for more than 60 %. ALDI’s strong growth has increased industry concentration and currently holds an estimated 10% of Australia’s market.