Prime Minister Anthony Albanese has extended an invitation to Emirati retail giant LuLu Hypermarket to set up operations in Australia, a move aimed at injecting long-awaited competition into the nation’s highly concentrated supermarket sector.
Mr Albanese confirmed the approach during his stopover in the United Arab Emirates, where he met LuLu Group chairman Yusuff Ali. The visit coincided with the implementation of a new free trade agreement between Australia and the UAE, which removes tariffs on nearly all Australian exports and paves the way for greater investment from the Gulf nation’s sovereign wealth funds.
“One of the great things about the chairman’s company is there are 300 supermarkets just like this one. I have encouraged him to come to Australia as well,” Mr Albanese said. “We need more competition in the supermarket sector, and we have had a little discussion about that.”
LuLu Hypermarket, one of the largest chains in the Middle East, operates more than 250 outlets across the Gulf states and beyond. The company already has direct ties to Australian producers, including mango, orange, and halal-certified meat suppliers.
The prime minister highlighted LuLu’s ability to connect directly with Australian farmers and exporters, ensuring a stronger supply chain while potentially bringing down costs for consumers.
Australia’s $130 billion supermarket sector has faced intense scrutiny in recent years amid rising grocery prices and ongoing cost-of-living pressures. The Australian Competition and Consumer Commission (ACCC) found in March that Coles and Woolworths — which control two-thirds of the market — had “limited incentive” to compete aggressively on price, though it stopped short of declaring prices excessive.
Critics, including The Greens and Nationals, have argued the duopoly leads to inflated costs for households and stifles competition. Both parties previously backed break-up powers to force Coles and Woolworths to divest assets if they were found to be uncompetitive — a policy later adopted by the Coalition.
Mr Albanese, however, dismissed divestiture laws, saying Australia was “not the old Soviet Union.” Instead, his government has focused on measures to increase competition, including rewriting zoning and planning laws to prevent existing supermarket chains from blocking new entrants by hoarding development sites.
The entry of a major foreign competitor like LuLu could dramatically reshape Australia’s retail landscape. The government has promised further reforms, including the possibility of an “excessive pricing regime” to punish supermarkets caught price gouging.
For now, Albanese’s invitation signals a strategic push: opening Australia’s doors to global retail heavyweights in hopes of driving down prices, widening consumer choice, and putting real pressure on Coles and Woolworths for the first time in decades.