Fact-checking @coles and @woolworths for #SPCsunday, by @adropex

Comments

1. Errol Brandt says

   February 9, 2014 at 5:53 pm
   
   

   Good analysis Lesley.

   The figure of 80% of the packaged grocery market is about right. If you include fresh fruit and produce the figure drops to around 60%. In this case we’re talking about packaged goods, so 80% is comparable. http://theconversation.com/factcheck-do-coles-and-woolies-control-80-of-the-market-15418

   A high proportion of Australian produced private label is not necessarily a good thing. It’s really something that a company like SPCA would do only out of desperation. These private label contracts are onerous, unrewarding and expose the manufacturer to all sorts of problems around intellectual property.

   If Australia had 4 or 5 major retailers, rather than 2 dominant retailers, companies like SPCA would have much greater bargaining power. As it stands today, dealing with Coles and Woolworths is like negotiating with a gun to your head.
2. Jade says

   February 9, 2014 at 7:25 pm
   
   

   We only have 2 major retailers because people want to shop there. I have an Aldi & IGA closer to me than Woolies or Coles. I go to Woolies. Much better store than & Woolies. Shopping centres that have all 4 retailers. Coles & Woolies packed, IGA & Aldi are not.

   If was yet another new entrant people would still shop at Coles & Woolies. They provide fantastic customer service & value. Other stores don’t

   • jimbok says

     February 10, 2014 at 11:25 am
     
     

     Jade, you are obviously not a pensioner or a self funded retiree. I am one of the latter and I do around 70% of my shopping at Aldi about 20% at Coles and a little at Woolworths, the last two mainly for gluten free products which is the only area where they excel.

     Compared to when I was not so price conscious and shopped primarily at the big two, the amount saved buying similar items is incredible. The same fresh squeezed Australian orange juice (same package with a different name sells for $3.99 compared to 6.99 at the others). Mind you I still look for other Australian products and, while Aldi do not carry a large range I try to balance loyalty to Aussie producers with living within my means
3. stuarterrolanderson says

   February 9, 2014 at 9:18 pm
   
   

   Jade, I dont agree with you. The ACCC has been investigating 50 claims of misuse of market power or unconscionable conduct by unnamed managers working for unspecified supermarkets. Small local shops are struggling to compete and consumer’s favourite brands are disappearing from the shelves. Small businesses are important contributors to Australia’s economy. They employ approximately 5 million Australians and make up around 96% of the actively trading businesses in Australia. There is also growing evidence about the tactics the major supermarkets are taking in negotiating agreements with suppliers and processors in the food industry. Successive inquiries have heard evidence of these concerns, yet there has been no effective action. According to the Australian Competition and Consumer Commission (ACCC), prior to them offering confidentiality many farmers and small business people who supply the supermarkets did not want to speak out publicly about their experience as suppliers for fear of any repercussions. The ACCC chairman reported that the investigation had been slowed by the “complexity and breadth of investigations” and by the “challenges associated with gathering evidence while safeguarding the business relationship witnesses have with the supermarket chains”. There are two specific and subtly different points of regulatory inquiry here. First, the ACCC is assessing allegations that employees of the supermarkets have demanded “various payments” from suppliers that are “above and beyond” the routine of the supply chain. At the same time the regulator is assessing whether major chains are misusing their very obvious market power by discriminating in favour of increasingly ubiquitous house brands.
   According to research from Macquarie Private Wealth the pervasiveness of the Coles and Woolworths supermarkets ensures they both build market share against other competitors. Macquarie says that Coles’ and Woolworths’ share of the $112 billion grocery market has increased over the last five years from 48 per cent to 56 per cent.
   Macquarie says the biggest contributor to profit growth is the transfer of profits from the companies that supply products to Coles and Woolworths. The broker estimates that the big two have crunched supplier profit margins by 6 per cent over the last five years in what it describes as ‘‘the ongoing profit transfer from suppliers to retailers’’.

   I also have Woolies, Coles and Aldi to choose from. Aldi often has better prices, but has fewer lines of stock than Coles or Woolworth. In our family we shop at all three. Where Aldi sells alcohol I find it is it is much better value than Woolworths.
4. maggie atlas says

   February 9, 2014 at 10:39 pm
   
   

   Finally at last no real competition and policies profit agenda’s that I think caused demise of many & the sell off to foreign investors the expanding profits and the shrinking choice & real competition. The globalisation scheme global large corporations have no national loyalty only profit which is the corporatisation globalisation agenda impossible to get to this point without the silence of Global Corporate Main Stream Media and assistance of installed facilitating governments. Fact or fiction right or wrong that is what I believe.
5. Jan says

   February 10, 2014 at 8:00 am
   
   

   I’ve been trying to make sense of the IGA web site – they too have own brand products and promote black and gold – what percentage of these products are Australian?
   http://www.ethical.org.au/get-informed/issues/supermarkets-in-australia/