The Australian Competition and Consumers Commission has heard that a lack of competition means large supermarket chains take consumers for granted.

Providing evidence on the first day of the ACCC inquiry into competition and pricing in the Australian grocery sector, Peter Kell, CEO of Choice consumer group, said that a lack of competition cost shoppers in terms of savings and innovation.

"In an environment of rising prices, it is vitally important that consumers can have confidence that the prices they are being charged for essential foods and groceries are fair, and are not the result of market power, particularly in relation to the two major grocery chains in Australia," Kell told the inquiry.

In the first submission to be heard by the ACCC, Choice proposed several initiatives designed to spur greater competition, including the publication of a quarterly price index, a national comparison pricing scheme and reforms to the Trade Practices Act to block large companies swallowing up smaller grocers.

The Australian government launched the ACCC inquiry in January in a bid, it said, to ensure consumers get a "fair deal at the supermarket".

The ACCC is due to publish its findings in July.