Woolworths’ claim that average grocery prices have fallen for eight consecutive quarters is being questioned, with independent analysis revealing a different picture for shoppers and raising scrutiny of the supermarket’s methodology amid ongoing concerns about cost of living pressures.
The supermarket giant declared the sustained decline in prices as part of its recent half-year financial results. However, data tracked by Savings.com.au shows that the cost of a typical trolley of Woolworths groceries has increased from $292 two years ago to $315 today, contradicting the narrative of consistent price decreases.
A detailed examination of individual product prices reveals limited evidence of widespread price reductions. According to reporting by The Guardian, the price of Weet-Bix (375g) has risen 14%, Coca-Cola (1.25 litres) is up 13%, Vegemite (150g) has increased by 5%, beef mince (500g) is 30% more expensive, and free range eggs (large) have jumped 19% over the same eight-quarter period. Only a handful of items, such as washed potatoes, cheese slices, white sugar, and long grain rice, have remained stable or seen price falls.
The discrepancy between Woolworths’ claims and consumer experience comes as the Australian Bureau of Statistics (ABS) identified food and non-alcoholic beverages as a significant contributor to annual inflation in both 2025 and 2024, rising 3.4% in the latest figures. Notably, the ABS utilizes scan data from both Woolworths and Coles, alongside other retailers, to calculate grocery price changes.
The core of the issue lies in Woolworths’ use of the Fisher method, a statistical formula that tracks the average price of items actually sold, rather than changes in shelf prices. According to Graham Cooke, head of consumer research at Finder, this methodology is akin to a hotel chain claiming falling average stay costs because guests are opting for cheaper rooms. “It is the corporate equivalent of a hotel chain claiming ‘average stay costs’ are dropping because guests have stopped booking suites and are now squeezing into budget rooms,” Cooke said.
The Fisher method effectively accounts for consumer behaviour, meaning that if the price of a premium item like steak increases and consumers switch to a cheaper alternative like mince, the average price paid will decrease, even though the price of steak itself has risen. This reframes a decline in purchasing power as a saving, masking the reality of rising grocery costs.
“To announce eight quarters of price declines doesn’t pass the pub test. If prices were truly deflating for the benefit of the customer, profit margins typically wouldn’t be climbing,” Cooke added.
A Woolworths spokesperson defended the methodology, stating that their measurement of price changes is based on “the ongoing shifts in which products customers are actually putting in their baskets day-to-day.” The spokesperson described it as a “recognised metric that takes into account the specific volumes of each item sold in Woolworths stores.”
The supermarket’s use of this statistical model is occurring at a time of heightened scrutiny of the major supermarket chains. Coles recently defended allegations in court from the consumer regulator that it offered “illusory” price discounts. Woolworths is facing similar allegations and is scheduled to appear in court later this year. Both chains have also been increasing their profit margins during the period of inflation, a trend that could attract further political attention.
According to a report from GSN News, Woolworths began dropping prices on over 400 essential grocery items in May 2025, with cuts intended to be permanent through at least 2026. Examples cited include chicken schnitzels falling from $10.50 to $9, Greek yoghurt (1kg) from $4.20 to $3.80, and Coke (2L) from $4.20 to $3.70.
For Woolworths shoppers to genuinely pay less than they did two years ago, they would need to exclusively purchase the limited number of items that have actually decreased in price – potentially resulting in a diet consisting primarily of washed potatoes, cheese slices, white sugar, and long grain rice.
