8 ways Woolworths and Coles squeeze their suppliers and their customers
- Written by Sanjoy Paul, Associate Professor, UTS Business School, University of Technology Sydney
To hear the Woolworths and Coles chief executives speak on Four Corners this week, you’d think their industry was highly competitive.
For instance, Woolies’ chief Brad Banducci said:
this community over here, there will be three Coles stores within two kilometres of it, at least one ALDI store, a series of independents, ability to within 24 hours have a quarter of our store delivered by Amazon – it’s an incredibly competitive market
Meanwhile, Coles’ chief Leah Weckert said:
there are quite often comparisons that are made between the UK and Australia, but Australia has about a third of the population, and we operate stores on a geographic footprint 30 times the size, those considerations need to be taken into account
Between them, Coles and Woolworths control 65% of Australia’s grocery market. Aldi has just 10%, and independents such as IGA have the rest.
Four Corners reported that meant that, on average, for every $10 Australians pay for groceries, $6.50 is spent at Coles and Woolworths, and just $1 at Aldi. In the United Kingdom, there are five major chains vying for a cut of that $10.
But having a large market share isn’t the same as unreasonably using it.
This week’s Four Corners set out eight ways in which Coles and Woolworths are said to use their market power, each of which will be examined by the Australian Competition and Consumer Commission’s inquiry into supermarkets.
Many hurt their suppliers more than their customers.