As Australians, we’re no strangers to the weekly grocery run, and for many, managing our budgets is more crucial than ever. With the cost of living on the rise, it’s important to know where our hard-earned dollars are going, especially when it comes to the giants of grocery shopping: Coles and Woolworths. But did you know that these familiar names are not just big players locally, but also rank among the most profitable supermarkets in the world?
A recent investigation by the Australian Competition and Consumer Commission (ACCC) has shed light on the practices of Coles and Woolworths, as well as their discount rival ALDI, during a time when many Australians are feeling the pinch. The ACCC’s comprehensive 441-page report, which is the result of a year-long inquiry involving public and private hearings, submissions, and consumer surveys, has led to some startling conclusions and a call for widespread reform in the supermarket sector.
The report highlights that while we’ve been tightening our belts, these supermarkets have been boosting their profits, in part by increasing prices and using promotions that can make it difficult for shoppers to discern a genuinely good deal. The ACCC’s findings suggest that at least some of the grocery price hikes have contributed to additional profits for these retailers, rather than just covering increased business costs.
In response to these findings, the ACCC has put forward 20 reform recommendations to the federal government. These include proposals to increase pricing transparency, such as requiring supermarkets to publish all prices on their websites and allowing online comparison tools to access this data. This would empower shoppers like us to make more informed decisions and potentially save money by comparing prices more easily.
Another significant recommendation is aimed at tackling ‘shrinkflation’, a tactic where product sizes are reduced without a corresponding price drop, effectively masking a price increase. The ACCC suggests that supermarkets should notify customers when a product’s size has decreased, helping consumers to be aware of subtle changes that could impact their wallets.
The ACCC also calls for more transparency in supermarkets’ negotiations with fresh produce suppliers, addressing concerns about the significant bargaining power imbalance that can leave suppliers at a disadvantage. This includes providing suppliers with detailed information about supply forecasts and greater clarity about the tendering processes for negotiating prices and volumes.
Deputy Chair of the ACCC, Mick Keogh, believes that while there is no single solution to all the issues identified, the recommendations will lead to better outcomes for consumers and suppliers, and enhance competition in the sector.
The timing of the report is particularly relevant, as it comes ahead of an election where cost-of-living policies, including the price of housing, utilities, and groceries, are expected to be key issues. Treasurer Jim Chalmers has indicated that the government is committed to ensuring Australians get a fair deal at the checkout and that suppliers are treated fairly.
The ACCC’s report also touches on the structure of the grocery sector, describing it as an ‘oligopoly’ with Coles and Woolworths holding a combined 67% share of national grocery sales, followed by ALDI with 9%, and Metcash-supplied supermarkets with 7%. Despite this dominance, the ACCC acknowledges that the position of Coles and Woolworths is likely to continue, given their entrenched status.
As we navigate the aisles and check our receipts, it’s important to stay informed about the practices of the supermarkets we rely on. The ACCC’s recommendations, if implemented, could lead to a more transparent and competitive market, ultimately benefiting us, the consumers. It’s a reminder that we should always be vigilant about where our money is going and take advantage of any tools and information available to maximise our savings.
What are your thoughts on the ACCC’s recommendations? Have you noticed price increases or changes in product sizes during your grocery runs? How do you shop smart to get the best value for your money? Share your insights in the comments below.
Also read: Woolworths and Coles are making big changes. Will shoppers stick around?
