Lulu, the Middle East's "hypermarket", could be coming to Australia - but it's unlikely to have an impact on the duopoly

The Prime Minister has urged a prominent Middle Eastern billionaire to bring his global retail empire down under to challenge Australia’s supermarket duopoly.

Anthony Albanese recently finished a 10-day international tour with a stopover in the United Arab Emirates, visiting a Lulu “hypermarket” and extending an invitation to company chairman, M. A. Yusuff Ali, who has been named the most influential expat in the UAE.

“I’ve encouraged him to come to Australia,” he said. “We need more competition in the Australian supermarket sector.”

The retail king presides over the $7.3 billion company which boasts 240 stores across the Middle East and Asia.

“This company is big enough to have direct relations with (Australian) producers, whether they be mango producers, the orange producers, the meat producers that the chairman met in Mudgee that are still providing Halal-certified meat into this market,” Mr Albanese said.

Speaking on the Australia Institute’s Follow The Money podcast, Director of International & Security Affairs, Doctor Emma Shortis pointed out the public plea coincided with the start of Australia’s free-trade agreement with the UAE.

“This is a nice example of how the establishment of effective, deep, diplomatic relationships can have potentially significant impacts on our local economy and how much those relationships matter,” she said.

On Lulu’s own figures, its typical hypermarkets are roughly two to three times as large as Australian supermarkets, Woolworths and Coles and sell everything from groceries and fashion to electronics, appliances and sports equipment.

However, speaking on the Australia Institute’s Dollars & Sense podcast, Chief Economist and co-host, Greg Jericho, warned Aussie shoppers not to get too excited just yet.

“It is going to happen? Probably not,” he said.

“I figured they would have already done it,” said co-host and Senior Content Producer, Elinor Johnston-Leek. “It’s a very cute name but it does feel like a bit of a nothingburger.”

Mr Jericho said Australia is “going to need to get more competition” from foreign companies, supermarkets, department stores to fire up competition again.

“For many people, there really isn’t much of a choice. You can go to Coles or Woolies.”

“They dominate the market so much,” added Ms Johnston-Leek, “they really don’t need to compete in price.”

“We did some research showing that they take it in turns with sales on things,” said Mr Jericho. This strategy is in comparison to what supermarkets usually do, like setting prices due to demand or to cover costs.

He pointed to the introduction of German supermarket chain, Aldi, saying it initially “set off a bit of a price war” and provided some cost-of-living relief to Australian shoppers.

As of late 2024/early 2025, it holds approximately 9 percent of the grocery market.

“Coles and Woolies know the threat’s gone and everyone’s settled into their comfort zone.”

If Anthony Albanese was serious about Lulu setting up shop in Australia, Mr Jericho said the government would need to provide extra support so it can get a foothold in the market.

“Where are they even going to build these supermarkets?

“The problem is that Coles and Woolworths are very good at land banking, buying up vacant land and saying, we’re going to put a supermarket there, but really what they’re doing is buying it so that no one else can put a supermarket there.”

He said there needs to be a prices commission because the Australian Competition and Consumer Commission (ACCC), “can’t actually look at prices”.

“They don’t care what Coles or Woolies are charging unless their colluding in their prices.

“If they’re just setting prices that are essentially price gouging, the ACCC has no power to investigate.

“We need someone to come in and say, “Show us your books. Justify it to us or we’re going to start handing out some massive fines.”

Without that, Mr Jericho said Lulu would fail to make an impact.

“It’s certainly not the silver bullet, especially because the gun’s not even loaded.”