ACCC report into supermarkets (https://www.accc.gov.au/inquiries-and-consultations/supermarkets-inquiry-2024-25/final-report) found no evidence of price gouging. They did find they have increased margins over the last 5 years, and don't try too hard to undercut each other.

There are recommendations around dealing with suppliers and promotions but nothing that suggests a significant impact on revenue or margins. Perhaps the only risk may be that reforms require a better deal for supermarket suppliers: normally increased supplier costs would just be passed on but there may be some reluctance to do this in the short term for PR/goodwill reasons. There is still a perception of price gouging:

The Coalition and Greens are pushing for powers to break up the big two:

The Coalition and Greens are renewing calls for Labor to embrace powers to forcibly break up supermarket chains such as Coles and Woolworths despite the competition watchdog shunning the idea in its review of the sector.

The shadow treasurer, Angus Taylor, challenged the government to allow supermarket competition laws – which include divestiture as a “last resort” – to be debated and passed when parliament returns next week for the pre-election budget.

I suspect the Greens may genuinely want to break them up, but doubt the Coalition does. The result would likely be store closures in regional areas. So even if the Coalition passed the legislation they probably wouldn't actually break them up. Stranger things have happened.

I continue to hold in SM and RL. My thesis is that it's an out-of-favour company due to media coverage but the regulator risk is over blown. Was expecting a bit more recovery in the share price after the release of this report so I may have missed something.