When a major supermarket chain cuts bread prices, the rest often follow suit. This domino effect isn’t random—it’s price leadership in action, a powerful force shaping how Australian markets function and how much we all pay. As 2025 unfolds, price leadership is under the spotlight, especially as regulators and consumers watch for fair play and competitive balance.
Price leadership occurs when one dominant firm (the ‘leader’) sets the price for a product or service, and other competitors (‘followers’) adjust their own prices accordingly. This phenomenon is especially common in sectors like groceries, fuel, and banking, where a few big players control significant market share.
This year, price leadership is especially visible in three sectors:
Woolworths and Coles continue to dominate the grocery landscape. In February 2025, Woolworths’ high-profile price freeze on 400 staple items triggered a rapid response from Coles and ALDI, who introduced their own price-matching campaigns. The ACCC has since warned these chains to avoid using price leadership as a covert tool for maintaining high margins under the guise of competition.
Australia’s major petrol retailers—BP, Caltex, and Shell—are closely watched for pricing moves. When BP rolled out a 5-cent-per-litre discount for EV drivers in early 2025, competitors quickly adjusted their own loyalty offers. This pattern helps stabilise prices but can also limit true price competition, a concern highlighted by the Australian Competition and Consumer Commission’s latest Fuel Monitoring Report.
With the Reserve Bank’s cash rate holding steady so far in 2025, the Big Four banks have demonstrated classic price leadership in mortgage rates. When Commonwealth Bank nudged up its fixed-rate home loan by 0.15%, Westpac, NAB, and ANZ followed within days. This synchronisation, while efficient, raises questions about whether consumers are getting the best possible deal.
The ACCC has intensified scrutiny of price leadership practices in 2025, particularly in sectors where consumers feel squeezed by cost-of-living pressures. New draft guidelines released in March reinforce the need for transparency and warn against ‘shadow pricing’—where firms mirror each other’s prices without explicit communication.
For businesses, understanding price leadership dynamics is crucial to developing competitive strategies—whether you’re a challenger brand or an established leader. For consumers, being aware of how price signals travel through the market can help you spot better deals and advocate for greater choice.