I am from Sydney, and I have been told by friends from other states that the food prices here are much higher than anywhere else: even Melbourne (for non-aussies: a similarly sized city - 4 mil inhabitants vs 4.5 mil in Sydney).
I think there is also some concern that the Coles/Woolworths duopoly is driving prices up. I usually avoid big supermarkets, but I haven't noticed any significant difference in price when I have visited them.
Veg like carrots are a good way to get full for not much.
We found it was also helpful to have a weekend budget where you could treat yourself. Keeps you sane.