Supermarkets are a key influence on eating behaviours, but it is unknown if the promotion of food within stores varies on a geographic gradient from urban, to urban-fringe and non-metropolitan areas. The present study aimed to assess the shelf space and strategic placement of healthy and discretionary foods in each of urban, urban-fringe and non-metropolitan Australian supermarkets. Design/Setting In-store audits were conducted in stores from one of the two major Australian supermarket chains in urban (n 19), urban-fringe (n 20) and non-metropolitan (n 26) areas of Victoria. These audits examined selected food items (crisps/chips, chocolate, confectionery, soft drinks/sodas, fruits and vegetables) and measured the shelf space and the proportion of end-of-aisle and cash register displays containing these products. Store size was measured as the sum of aisle length. Differences in the supermarket food environment with respect to location were assessed, before and after adjustment for neighbourhood socio-economic position. The strategic placement of discretionary foods was commonly observed in all supermarkets. Adjusting for store size (larger in urban-fringe and rural areas), urban stores had greater shelf space devoted to fruits and vegetables, and less checkouts with soft drinks, than urban-fringe and rural/non-metropolitan areas. Differences remained following adjustment for neighbourhood socio-economic position. No clear pattern was observed for end-of-aisle displays, or the placement of chocolate and confectionery at checkouts. The shelf space of healthy and discretionary foods in urban-fringe and rural stores parallels the prevalence of overweight and obesity in these areas. Interventions in urban-fringe and rural stores targeting the shelf space of healthy foods and the placement of soft drinks at key displays may be useful obesity prevention initiatives.