Woolworths and Coles' expansion of smaller-format Metro/Local stores divides Australian cities by income and price
Consensus Summary
Australian cities are being divided by a new supermarket divide as Woolworths and Coles rapidly expand smaller-format Metro and Local stores in affluent inner-city and eastern suburbs, while maintaining full-service supermarkets in lower-income areas. The trend began in 2018 with Woolworths Metro stores in Sydney and Melbourne, followed by Coles Local in 2020, creating a clear geographic line where higher-income neighborhoods now host pricier, convenience-oriented outlets. Residents in areas like Sydneyâs Alexandria protested the conversion of their Woolworths to a Metro store in 2023, but the changes persisted, with nearly 140 such stores now operating across Australia. These stores are about a quarter the size of traditional supermarkets, stock fewer products, and often charge 5â15% higher prices, undermining the long-held expectation that grocery costs would remain consistent regardless of postcode. The expansion is seen as a defensive strategy by the duopoly to block competitors, with former watchdog Allan Fels noting it deters new entrants while consolidating market share in dense urban areas.
â Verified by 2+ sources
Key details reported by multiple sources:
- Woolworths converted its Alexandria (Sydney) supermarket to a Metro store in 2023, sparking local protests led by the Alexandria Resident Action Group and Lord Mayor Clover Moore
- Justin Nolan, Woolworthsâ then-head of Metro stores, apologized at a 2023 town hall in Alexandria for not informing residents about the conversion plan
- There are now nearly 140 Woolworths Metro and Coles Local stores across Australia, up from about 30 Woolworths Metro stores seven years ago (2019) and zero Coles Local stores at that time
- Woolworths Metro stores are about 600 square meters (a quarter the size of a typical 2,500 sqm Woolworths supermarket) and stock around 10,000 products compared to 28,000 in full-size stores
- Woolworths Metro stores in Sydney form a geographic line from Parramattaâs southeast to Maroubra, concentrated in inner-city, inner-west, eastern suburbs, and north shore areas
- Melbourneâs Woolworths Metro line runs from Ascot Vale northwest of the CBD to southeast suburbs like St Kilda and Caulfield South, with few Metro stores in lower-income western suburbs beyond Hawthorn
- Coles Local stores in Melbourne are concentrated in affluent eastern suburbs (e.g., Surrey Hills, St Kilda, Glenferrie Road Hawthorn, Camberwell) and inner-city areas like Fitzroy and South Melbourne
- Coles opened its first Sydney Local store in 2020 by converting the Rose Bay location (affluent suburb with waterfront residences and Rupert Murdochâs dining spot, Catalina restaurant)
- Woolworths Metro stores often charge a price premium of 5â15% compared to full-size Woolworths supermarkets, with a comparison shop finding Coles Local groceries cost nearly $20 more for a beef stroganoff recipe
- Woolworthsâ failed âThe Kitchenâ Metro store in Double Bay (opened 2019 beneath a full-size Woolworths) closed after shoppers avoided it for higher prices and opted for the full-size store upstairs
Points of Difference
Details reported by only one source:
- Vanessa Knight, who led the Alexandria Resident Action Group, still shops at the Metro but acknowledges itâs a corporate decision targeting areas with higher disposable income and less competition
- Former competition watchdog chair Allan Fels stated the expansion of Metro/Local stores is a defensive tactic to deter new competitors and enhance market share in dense suburbs
- Retail consultant Trent Rigby noted private-label products are often removed from Metro stores, forcing shoppers to pay more for branded items
- Woolworths declined to provide a list of Metro supermarkets or converted stores, requiring data scraping from website archives and union records
- No additional unique details beyond SMH; identical content in both articles
Contradictions
Conflicting information between sources:
- Both sources are identical; no contradictions exist between SMH and THEAGE on facts, dates, or events
Source Articles
Gentrified groceries: The new food line splitting your city
One in four Woolworths in Sydney are now Metro stores, while Coles is playing catch-up by growing its Local chain. Is the gentrification of supermarkets leaving shoppers worse off?...
Gentrified groceries: The new food line splitting your city
One in four Woolworths in Sydney are now Metro stores, while Coles is playing catch-up by growing its Local chain. Is the gentrification of supermarkets leaving shoppers worse off?...