As Australia grapples with a supermarket monopoly, Prime Minister Anthony Albanese hopes the expansion of this Emirati “hypermarket” might bring in some competition.
Colesworth vs Lulu?
As Australia grapples with a supermarket monopoly, Prime Minister Anthony Albanese hopes the expansion of this Emirati “hypermarket” might bring in some competition.
Colesworth vs Lulu?
Honestly, it’s not going to do much - even Aldi has had a limited overall impact.
Both Coles & Woolies are publicly traded companies, we can freely see their financials every quarter. They both post a net profit of ~5-6% once it’s all said and done - hardly a fat margin for other players to come in and drastically undercut.
The bare truth of the matter is that we have a small population in a large amount of space, with compare high wages (this is good). Transporting fruit and veg from tropical FNQ to VIC and TAS in the winter comes with associated costs; labour, fuel, wear & tear all need to be accounted for.
It all comes back to property prices, though - we feel that food is expensive because the cost of keeping a roof above your head, whether through owning or renting, has just skyrocketed over the past 30 years.
Every other beat-up article talking about inflation or supermarket prices is just another distraction from the actual underlying cause: housing being turned into a financial vehicle.
So let’s ignore the noise, and actually address the root cause by going after all of the unfair tax incentives and subsidies afforded to the land-hordes at the cost of everyone else.
While I do agree that housing is such a much more important factor in cost of living than Colesworth gouging but it is a real issue and competition may improve it.
I think that a better solution would be to transition the big chains to some combination of worker/consumer ownership. But increasing competition is the only solution to this one inside the Overton.
Again, I reiterate that Coles and Woolworths posted a net profit of ~5-6%. Meanwhile, Coca Cola posted a Net Profit of ~22.6%. But sometime, it’s all Coles/Woolies fault - and some mythical additional supermarket entrant is going to come in and single-handedly fix the affordability crisis.
This whole fixation on Supermarkets price gouging is such obvious political theatre, and it’s saddening to see so many people just go with it, and not question why that narrative is being pushed.
Property prices sky-rocketing over the past 30 years has caused the biggest wealth transfer away from the working class over the past ~150 years. The knock-on effects of this are why people wince at the checkout line - not because cans of Coke are ~$1ea now.
nah fam, they do take the piss,.
Take for instance a bog standard coke can 10 pack. Look at the “savings” Coles don’t even bother with “savings”
Aldi sell a sixpack for 8 bucks and a 30 pack for 31, drakes sells a 10 pack for 13, on par with my local Market Europa, although they recently had them for 10.
Now here’s the real fun part: Their “non-special” - which I have seen them try and sell at - pricepoint for a 30 can box is 50. Big W - Also owned by woolworths group - sells them for 30.
It’s greed.
Chocolate was a good measure of Colesworths greed, at Aldi a block of milk chocolate was $3.40 and at Woolworths it was $10, at Coles it was $8.90.
Do you mean the same brand of chocolate?
ThatKamGuy mentioned the price cycle, here’s an article on it:
https://www.abc.net.au/news/2024-10-26/coles-woolworths-supermarket-price-specials-cost-of-living/104470674
But yeah I switched to Aldi’s “regal cola” instead of buying coke, Aldi has it nice and low cost all the time
This isn’t some big gotcha… it’s literally the standard weekly catalogue promo cycle; Woolies/Big W might have them on sale this week, and Coles will have them on sale the next. Rinse and repeat every few weeks.
They don’t expect (m)any people to buy them when they’re not on promotion; they use the inflated RRP to make the promotional price (that they actually expect people to buy at) all the more attractive and get people into the store.
It’s not some grand conspiracy, it’s basic Marketing.
These are different companies with different owners. What you are describing here is collusion.
It’s not collusion; that is a specific legal term - but even more broadly, there isn’t any active discussion between the two retailers. If there were, given the tens of thousands those two companies have employed, wouldn’t you think there’d have been whistleblowers, ACCC fines and the like?
I’m not trying to defend supermarkets here, just dispel miss-information.
Prices are rising because costs are, I worked in agriculture when the Russian invasion of Ukraine occurred - causing fertiliser costs to literally triple, and labour costs for farm hands sky rocket due to the lack of backpackers during COVID lockdowns. Both of those costs got passed on to the supermarkets and ultimately to consumers.
Publicly traded companies have open financials; anyone can open up their most recent P&Ls and see what their actual Net Profit %s are, and they’ve remained flat for a very long time.
You would be able to see that there isn’t heaps of fat that another player in the space could do to noticeably impact basket spend.
We already have Metcash/IGA, Aldi, Amazon, Chemist Warehouse and Bunnings all providing a tonne of competition in key grocery categories.
What makes you think adding another would make any difference?
How is it that you think this is a good thing?
I am in no way, shape or form saying it is? Just stating a fact - this is a practise called price anchoring.
The comment I was replying to was trying to use it as an example of supermarket greed & price gouging - when it’s really just a way to make the price they actually expect to sell it at (with the regular 40-50% discount) seem like a great deal in comparison.
except BigW doesnt’ price anchor like that. Still woolworths group.
Woolworths group are literally pushing the prices to see how far they can go. They set at one chain where it’s less expected that groceries would be bought, and then ram the shit out of the prices at grocery stores because they know it’s more likely to get picked up. Business practise? yes. Also greed.
Except, that they do? Go back to the Big W link you posted earlier - they’re back up to the MSRP:
It’s something that every company does, because if a product is permanently ’on sale’, then they run the risk of being fined (maybe by the ACCC? I’m not quite sure which body is in charge) for false advertising. There are strict guidelines that dictate what a product must be at the “was price” for a certain length of time, within a certain timeframe.
It’s not just Coles and Woolworths that do this; every other retailer is equally culpable: JB HiFi, Bunnings, Myer, Kmart, Chemist Warehouse etc.
Yeah, you’re right, these huge duopoly corporations aren’t greedy at all, my mistake.
Coles and Woolworths have pretty consistently posted Net Profits of ~5-6% for over the past decade (probably longer, I CBF checking).
Meanwhile Coca Cola most recently posted a Net Profit of ~22.6%; PepsiCo, Mondelez & Kraft-Heinz all post Net Profits of ~10-12%, while all avoiding paying Australian taxes - but nah, the Supermarkets are the ones being greedy.
I return to my original point; the reason why people are feeling the pinch at the checkout lane is predominantly because their discretionary spending funds have been annihilated directly (and indirectly) by skyrocketing property prices.
Everything else, including this baseless discussion on how just adding one more supermarket chain to the Australian market will somehow miraculously solve the current affordability crisis, is just theatre to distract from the actual underlying issue.
coles literally posted a revenue increase last year. wat.
Revenue is just cash in, it goes hand-in-hand with inflation. Shit is getting more expensive, no one is arguing that.
The cause of price increases are coming from higher up the chain; the big multinational corporations that supply into the supermarkets dictate prices. Those increased costs are passed onto the consumer.
But Net Profit % is the metric you need to look at in order to determine whether a company is price gouging or not. After covering supplier costs, logistics and storage costs, staffing costs, utilities and other overheads, as well as paying taxes, if a company is only pocketing 5-6 cents for every dollar in, that’s not them being greedy and pocketing ever increasing wads and wads of cash.
Honestly, I think a supermajority of shoppers wouldn’t even notice a ~5% reduction in the individual prices on a shelf label - not because they’re rich enough to notice care, but because it’s so insignificant when compared to the bigger costs they currently face (rent/mortgage, utilities, motor expenses etc.).
That is why I’m saying that adding another supermarket into the mix here in Australia is not going to have a noticeable impact on customer wallets. It’s just a distraction from the issue of land hoarding and rent-seeking causing the coming generations to be noticeably worse off than the ones that came before.
The sooner we stop following whatever distraction corporate media throws our way, and demand change that actually matters - the sooner we’ll be able to wrestle our futures out of the hands of the 1% of the 1%.
Uh oh, people won’t like you pointing out that Colesworth aren’t making huge margins and aren’t price gouging.
The issue is cost of everything in the supply chain before it gets to colesworth for us to buy has gone through the roof since Covid thanks to the governments terrible handling of, well, everything economy related since then. As you said, colesworth haven’t doubled their profit margin since prices have doubled. They’re not making gigantic profits despite their revenue increasing.
I don’t know how you got to house prices being the cause though. House prices are a symptom of the rampant inflation and other government policies, not the cause.