The Supermarket Price Gap

With food prices continuing to rise, where you shop has become just as important as what you buy. For many households, especially larger families and lower‑income earners, choosing a supermarket is no longer a matter of preference but a financial necessity, as even everyday grocery items can vary significantly in price depending on the retailer.

To understand how big these differences really are, health insurance comparison service iSelect analysed the cost of a basket of everyday grocery items across budget, mid‑tier and premium supermarkets in Australia, the US and the UK. This allowed us to compare available products across several different supermarkets to find out how much extra shoppers are paying for “premium”, and where savings can realistically be made.

Australian Grocery Prices

We looked at a sample of 10 typical products, including baked beans, plain yoghurt and white bread, and found a total basket of goods averaged $20.37 in a budget supermarket, $25.45 in a mid-tier supermarket and $59.61 in a premium supermarket.

These results show that it is 24.94% more expensive to shop at a mid-tier supermarket than budget supermarkets, and a whopping 192.64% more expensive to shop at premium supermarkets than it is budget supermarkets. On an individual level, that’s an average of AU$6.29 per product at premium supermarkets, AU$2.56 at mid-tier stores and AU$2.04 per item at their budget counterparts.

Australian Supermarket Tier Comparison, item-by-item

Budget vs Mid-Tier Supermarkets

Of the products analysed, the largest price gap between budget and mid-tier supermarkets was for corn flakes, with an average difference of AU$2.11. Chicken nuggets showed the second-largest gap at AU$1.81. However, in several cases, the price difference between budget and mid-tier supermarkets was found to be relatively minimal. For example, diced tomatoes are priced at AU$0.95 across both budget and mid-tier stores. Additionally, three other items (frozen mixed vegetables, baked beans and tomato soup) have a difference of just AU$0.01.

Mid-Tier vs Premium Supermarkets

The largest price differences between mid-tier and premium supermarkets were chicken nuggets (with premium stores more expensive by AU$8.59), and corn flakes (more expensive by AU$7.98). By contrast, the smallest price gap between these supermarket types was for protein bars, with premium stores just AU$0.60 more expensive.

Budget vs Premium Supermarkets

A similar pattern emerges when comparing budget and premium supermarkets in Australia. Chicken nuggets again show the largest price gap, with premium supermarkets charging AU$10.40 more, followed closely by corn flakes costing AU$10.09 more. At the other end of the scale, diced tomatoes show the smallest difference between stores, with shoppers paying just AU$0.74 more at premium supermarkets than at budget supermarkets. Protein bars and white bread are also relatively closely priced, with differences of AU$1.00 and AU$1.10 respectively.

American Grocery Prices

In the US, with a sample basket including 13 typical items, the total cost in a budget supermarket was US$42.77, US$44.25 in a mid-tier supermarket and US$70.27 in a premium supermarket.

This means it is 3.46% more expensive to shop at a mid-tier supermarket than budget supermarkets, and 64.30% more expensive to shop at premium supermarkets than budget supermarkets. The average price per item at a premium supermarket is US$5.41, compared with US$3.40 at mid-tier supermarkets and US$3.29 at budget supermarkets. On average, premium supermarkets are US$2.00 more expensive per product than mid-tier options and US$2.12 more expensive per product than budget supermarkets.

American Supermarket Tier Comparison, item-by-item

Budget vs Mid-Tier Supermarkets

American shoppers are most likely to notice a significant price difference between budget and mid-tier supermarkets when purchasing corn flakes, with budget options costing US$3.29 less. For multiple other items in our basket, price differences were minimal, with budget supermarkets only marginally cheaper for products such as protein bars, white bread, diced tomatoes and frozen mixed vegetables. In contrast, some meat products are actually cheaper at mid-tier supermarkets, with mince/ground beef and chicken breasts costing US$0.55 and US$5.59 less respectively, than at budget stores.

Mid-Tier vs Premium Supermarkets

The contrast between mid-tier and premium supermarkets is far more pronounced. For example, shoppers at premium supermarkets pay US$8.25 more for chicken breasts than those shopping at mid-tier stores. There are also price gaps for pre-packed salads and tomato soup, with premium prices greater than mid-tier options by US$5.64 and US$5.51 respectively. However, shopping at a premium supermarket does not always mean paying more, with these stores cheaper than mid-tier supermarkets for some items, including corn flakes (by US$1.39), baked beans (by US$0.95) and protein bars (by US$0.10).

Budget vs Premium Supermarkets

When comparing the two ends of the supermarket spectrum, shoppers unsurprisingly pay more at premium supermarkets in the majority of cases. For example, tomato soup costs US$6.83 more at premium supermarkets than at budget stores, while pre-packed salads are similarly priced higher, with a difference of US$6.21. However, premium supermarkets are not always more expensive. For shoppers looking to increase their protein intake, protein bars are actually slightly cheaper at premium supermarkets, costing US$0.08 less than at budget retailers.

British Grocery Prices

In the UK, a sample of 13 typical products revealed the total basket cost in a budget supermarket was £14.93, £16.19 in a mid-tier supermarket and £24.60 in a premium supermarket.

It is 8.44% more expensive to shop at a mid-tier supermarket than budget supermarkets, and 64.77% more expensive to shop at premium supermarkets than budget supermarkets.

Individually, premium supermarkets have an average price per item of £1.89, compared with £1.25 per item at mid-tier supermarkets and £1.15 per item at budget stores. On average, premium supermarkets are £0.65 more expensive per item than mid-tier retailers and £0.73 more expensive per item than budget supermarkets.

British Supermarket Tier Comparison, item-by-item

Budget vs Mid-Tier Supermarkets

Compared with the other countries analysed, the UK shows a much smaller price gap between supermarket tiers. Of the items included in the analysis, five out of 13 were priced identically at both budget and mid-tier supermarkets, those being corn flakes, white bread, diced tomatoes, plain yoghurt and frozen mixed vegetables. In addition, budget supermarkets were only £0.01 cheaper for items such as protein bars and baked beans. Conversely, mid-tier supermarkets offered lower prices for some products, including mince/ground beef (by £0.69) and tomato soup (by £0.04).

Mid-Tier vs Premium Supermarkets

The price difference between mid-tier and premium supermarkets in the UK is more varied than in Australia and the US. For example, protein bars cost the same at both supermarket types. Premium supermarkets are only marginally more expensive for several everyday items, charging just £0.05 more for corn flakes and smoothies, and £0.20 and £0.22 more for white bread and diced tomatoes, respectively. The largest disparities are seen in meat products, with shoppers paying £2.41 more for chicken breasts and £1.85 more for mince/ground beef at premium supermarkets.

Budget vs Premium Supermarkets

As one would expect, the difference between budget and premium supermarkets is slightly greater. For health-conscious shoppers, a pre-packed salad will cost £2.7 more at a premium supermarket, while chicken breasts cost £2.56 more. However, shoppers will only be £0.01 more out of pocket when purchasing a protein bar at these supermarkets, and £0.05 more out of pocket when purchasing corn flakes. For other items like white bread, diced tomatoes, tomato soup and baked beans, those looking to purchase from a premium supermarket will be paying between £0.20 and £0.28 more per item than they might at a budget supermarket.