Supermarket giant hits customers with a ‘boutique’ surcharge

Woolies is under fire for hitting consumers with higher prices in some of its stores, with a pack of toilet paper revealing the stark difference.

City shoppers are being slugged with higher prices at boutique supermarket stores than at larger suburban outlets, with the checkout hikes piling further pain on customers struggling in a cost-of-living crisis.

A Sunday Telegraph investigation can reveal supermarket giant Woolworths is charging around 10 per cent extra for products at its growing number of Woolies Metro stores, after an in-store check of identical grocery items available at a full-sized Woolworths supermarkets and smaller format Metros.

The investigation across inner city stores, which also involved checking the prices of 12 household staples at Coles, Aldi and IGA stores versus their smaller formats, found that shoppers paid up to $7.15 more at a Woolies Metro than a larger Woolworths.

Last week, a loaf of TipTop white bread cost $4.10 at Woolworths Town Hall, but $4.55 at Elizabeth St’s Woolies Metro, where customers also paid 50 cents more per kilo of bananas which were $2.50kg at Town Hall.

Barilla spaghetti dried pasta cost $3.85 at the Metro and $3.50 at the larger Woolies, while dishwashing liquid Morning Fresh had the biggest price gap, with a 400ml bottle priced at $6.35 at the Metro and $5.50 at Woolworths.

Customers were also being charged more for the same amount of toilet paper, sugar and tinned tomatoes at the Metro than at the larger city store.

Woolworths has been adding more Metros, which have smaller footprints, less staff and a reduced range of products, to its lineup of stores, with 104 compact stores accounting for around 10 per cent of Woolworths’ more than 1100 supermarkets nationwide.

A number of full-sized supermarkets have also been converted or are planned for transforming into Metros.

Coles are following a similar path with 29 smaller Coles Locals stores part of its overall count of 856 supermarkets. There were six Coles Locals outlets added to the company’s inventory in 2024, but the Telegraph’s investigation found items were priced identically across both formats.

IGA and Aldi also offer more streamlined versions of their full-item stores through IGA Local Grocers and Aldi Corner Stores

Groceries were priced identically across Aldi and Aldi Corner Stores while IGA goods showed sometimes significant variances due to stores being independently owned and operated franchises.

The same toilet paper was $1.30 more expensive at a Metro store. Picture: Supplied

But as supermarkets add smaller stores they say are tailored to meet the demands of specific communities and locations, an interim report by the Australian Competition and Consumer Commission (ACCC), currently conducting an inquiry into pricing tactics of Australia’s supermarket giants, found Woolworths accounts for 32.5 per cent of national grocery sales, followed by Coles at 24.8 per cent and ALDI at 8.1 per cent.

A spokesperson for Woolworths said: “While prices in these conveniently located stores may vary slightly due to higher operating costs, we remain committed to offering value and specials in every Metro store.

“Metros are planned for areas or sites where we can’t operate a full line supermarket but there is demand for groceries.”

A Coles spokesperson told The Sunday Telegraph: “Coles Local stores have the same standard shelf prices as our traditional supermarkets.

“This enables customers to complete their full weekly shop for everyday essentials at the same great value as our traditional stores.”

A Metcash spokesperson added: “While Metcash provides brand guidelines … independent retailers have the flexibility to set their own base shelf prices.

“Pricing can also be influenced by various factors, including store size and operating costs.”

Originally published as Supermarket giant hits customers with a ‘boutique’ surcharge