On the whole I find grocery prices similar to the UK. Some things dearer, some cheaper. In terms of quality, you get what you pay for. The farmers markets seem to increase the price by cutting out the middle man! I don't find the fruit & veg here any better or worse than the UK and was quite disappointed with central markets. No better than UK markets and probably less choice of produce. I was expecting something like the French & Spanish markets which really are fresh. As for food air miles, much is grown in Queensland - no different than the UK importing from Spain, Italy etc. You can of course by locally grown in season produce, but you can do that anywhere.
Bringing over Tesco gurus from the UK will not be a good thing. Tesco have been instrumental in destroying British farming and I wouldn't like to see that happen here. The $1/ltr milk thing here is just a loss leader, aimed at getting you in to spend money on other overpriced goods.
You buy what you can afford, and what you consider reasonable value for money - $13/Kg for bananas, I could afford that, but I'm not that desperate for bananas.
Wine is a strange one, not as cheap as I had hoped. Much the same as I paid in Sainsburys for a bottle of Oz plonk. Wines from outside Australia are more expensive & there is much less choice than the UK. Aussie beer is not that great, it has to be really cold as it tastes awful & a pint is not a pint down the pub.
Petrol is cheaper here, but if you drive around in a 4ltr Commodore you won't see the saving so buy a sensible car & as a bonus you won't look like a bogan.
Clothes are expensive for what you get, books are extortionate and are best bought online from Amazon, and CD's and DVD's are usually dearer here too so Amazon again.
It takes a while to find where to buy things from to get the best price and quality and once you stop converting things into £ and look at it as a percentage of your Australian dollar income it will make more sense.