Business & Finance The Great Takeover: Coles and Woolworths

How do you shop, and how do you want to shop?

  • Solely Coles or Woolies, not worried about their market share

    Votes: 15 25.4%
  • Majority of my shopping is through small local business

    Votes: 10 16.9%
  • I buy my meat at the local butcher and use the giants for general stuff

    Votes: 12 20.3%
  • I'm concerned, but still shop at the giants because its convenient

    Votes: 19 32.2%
  • I shop at the giants because I cant find any local grocers in my immediate area

    Votes: 3 5.1%

  • Total voters
    59

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I know some who tread these boards have been or are employed by these companies, what are they like as employers?

Started at Coles in year 10 and worked their in total about 10 years through 2 stints. Ending as Grocery Manager
I started when it was coles myer and witnessed the takeover and general change in attitude that came with the Wesfarmers purchase when they began to ship in all their upper management from England.

As employers they were pretty good pay decently for what is essentially unskilled labour, problem is the hours suck which is way a whole heap of the managers are either single or involved with other managers/coles people.

After wesfarmers took over they got very hard on the suppliers knowing because of the market share they could afford to play hard ball speaking to people form head office during my time and they told me they would see grown men crying coming out of meetings because the prices coles demanded just to get on the shelf would put them out of business.

There was a time John west tuna wasn't available from coles because JW wouldn't pay, eventually they came back and greenseas got forced out because coles wanted too much money.

They play very hard at making the public think they care but behind the scenes they are trying to screw suppliers for every dollar they can.
 
May 5, 2006
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The difference being that within this market Aldi are very much the 'little guys'.

The (pressing) problem is not that Coles/Woolworths are huge, it is that we have a duopoly.

If a third entrant makes that a tripoly (?), what does it matter if that entrant is big overseas?

The more competitors within any given market, the better the competition.

Hence my support for Aldi and anybody who shops there in Australia.

There are multiple issues in play.

1. Small business vs big business vs MNCs
2. Inefficiency of market forces (duopoly)
3. Customer outcomes
4. Local industry

As a consumer and concerned citizen you need to ask yourself what really matters?

Are you happy buying Chinese fruit and veg if it's cheaper?

Do you care if your local shop is owned by the bloke behind the counter or an ASX listed consortium with majority foreign shareholders?

Do you care what business model your shop and it's distributors, suppliers operate with?

I find the supermarket debate fascinating. Coles/Woollies are a duopoly. They are too expensive. They screw farmers. Their produce is no good. Their generic products are inferior to the brands they are squeezing out. Etc.

I've never shopped at Aldi as I live in Perth where they won't open until 2030 but I'll assume they are cheaper across the board. Is their produce any good? Are their non-perisable products any good? If they sell cheaper, do they source cheaper? If so are they not also screwing suppliers and farmers? Perhaps they run a leaner and more efficient Australian business model which makes them more profitable with lower margins but means less local jobs.

If we run with the premise that Aldi is every bit as good as Coles and Woollies and sustainably cheaper, then logically their market share will grow over time if the big two don't life their game. It's a big stretch, but let's say we get to the point that Aldi is the dominant player and Coles and Woollies are making up the numbers like IGA and Aldi are now. Is that a better or worse scenario to be in?
 

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Aug 11, 2006
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There are multiple issues in play.

1. Small business vs big business vs MNCs
2. Inefficiency of market forces (duopoly)
3. Customer outcomes
4. Local industry

As a consumer and concerned citizen you need to ask yourself what really matters?

Are you happy buying Chinese fruit and veg if it's cheaper?

Do you care if your local shop is owned by the bloke behind the counter or an ASX listed consortium with majority foreign shareholders?

Do you care what business model your shop and it's distributors, suppliers operate with?

I find the supermarket debate fascinating. Coles/Woollies are a duopoly. They are too expensive. They screw farmers. Their produce is no good. Their generic products are inferior to the brands they are squeezing out. Etc.

I've never shopped at Aldi as I live in Perth where they won't open until 2030 but I'll assume they are cheaper across the board. Is their produce any good? Are their non-perisable products any good? If they sell cheaper, do they source cheaper? If so are they not also screwing suppliers and farmers? Perhaps they run a leaner and more efficient Australian business model which makes them more profitable with lower margins but means less local jobs.

If we run with the premise that Aldi is every bit as good as Coles and Woollies and sustainably cheaper, then logically their market share will grow over time if the big two don't life their game. It's a big stretch, but let's say we get to the point that Aldi is the dominant player and Coles and Woollies are making up the numbers like IGA and Aldi are now. Is that a better or worse scenario to be in?
Sounds like your looking at an issue deeper down and more complex then skin deep. surely not a Western Australian?
 

JuddsABlue

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If we run with the premise that Aldi is every bit as good as Coles and Woollies and sustainably cheaper, then logically their market share will grow over time if the big two don't life their game. It's a big stretch, but let's say we get to the point that Aldi is the dominant player and Coles and Woollies are making up the numbers like IGA and Aldi are now. Is that a better or worse scenario to be in?

Having a monopoly/duopoly obviously isnt good, no matter whos on top

At the moment with Woolies/Coles having 75% between them, then a better scenario would be for Aldi/Woolies/Coles to occupy 75% (25% each). This takes a little power from the current two, while Aldi obviously gains power. Its not the perfect scenario though, obviously the smaller the % of market share gets, the better it gets for suppliers and small business owners

Honestly I would perfer to shop at woolworths for the obvious reasons, theyre the best shop imo, but that doesnt mean I shouldnt be concerned about the power they have over suppliers and the damage they can cause to them

After wesfarmers took over they got very hard on the suppliers knowing because of the market share they could afford to play hard ball speaking to people form head office during my time and they told me they would see grown men crying coming out of meetings because the prices coles demanded just to get on the shelf would put them out of business.

There was a time John west tuna wasn't available from coles because JW wouldn't pay, eventually they came back and greenseas got forced out because coles wanted too much money.

They play very hard at making the public think they care but behind the scenes they are trying to screw suppliers for every dollar they can.

Thanks for the insight, this is the perfect explanation of how bad things are now, let alone how things will be in 20-30 years time.
 

JuddsABlue

Norm Smith Medallist
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So today I needed a couple of smaller things and after creating this thread I thought I should 'do my bit' and buy them from a green grocer, I knew there was one in the shopping centre where I usually go to Woolies, so I went there instead.

It wasnt a great experience. With 1 register open, the line was about 6 people long, but I patiently waited while the checkout lady weighed everything that went through. By the time it was my turn, I saw the sign that said Cash Only, minimum eftpos $15. I only had about $5 worth of stuff, so I said that to them but they couldnt help. Usually I would just drop them there and leave and go somewhere else, but I wanted to persist so I went and got cashout at the ATM near by and paid cash (lined up behind 6 people again)

Next door was a deli, so on my way out I thought I'd great some turkey as I was running short. After a wait as someone ordered 4 different cheeses that had to be cut, I got my turkey. I went to pay the person behind the counter, but they told me to head back to the checkout where I was before, as its the only place to pay. So I lined up again behind 8 people and got out of there

So if I was to offer any suggestions to this guy running the store, if you want a better experience for customers, instead of running around stacking potatoes, when the line gets 6-8 people deep, jump behind the second register, and also get a register behind the deli so people can go to the deli and not have to line up in the fruit section. It'll make the whole thing quicker for everyone. With the bigger players having self checkout, people these days are quicky losing the patience of waiting around to leave. Im not sure what costs are associated with eftpos transactions, but surely $15 minimums are a thing of the past, I buy my $1.30 paper via eftpos :eek:
 
Aug 11, 2006
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So if I was to offer any suggestions to this guy running the store, if you want a better experience for customers, instead of running around stacking potatoes, when the line gets 6-8 people deep, jump behind the second register, and also get a register behind the deli so people can go to the deli and not have to line up in the fruit section. It'll make the whole thing quicker for everyone. With the bigger players having self checkout, people these days are quicky losing the patience of waiting around to leave. Im not sure what costs are associated with eftpos transactions, but surely $15 minimums are a thing of the past, I buy my $1.30 paper via eftpos :eek:
Geez, sounds expensive, Maybe they should start charging more so they can impliment these costly features?
 

JuddsABlue

Norm Smith Medallist
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Geez, sounds expensive, Maybe they should start charging more so they can impliment these costly features?

Like I said I dont really look at the prices of things, but what I got was cheap, so yeah maybe a price rise could help them out. A better store = happier shoppers = more return customers = greater market share.

I'm not really sure how much an extra register could cost for the deli part though, considering there was a closed checkout all I really asked was for them to utilise it more when they were busy

This discussion is about getting people through the door though, and many have indicated theyre happy to pay a little extra to support local businesses.
 
May 5, 2006
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Having a monopoly/duopoly obviously isnt good, no matter whos on top

At the moment with Woolies/Coles having 75% between them, then a better scenario would be for Aldi/Woolies/Coles to occupy 75% (25% each). This takes a little power from the current two, while Aldi obviously gains power. Its not the perfect scenario though, obviously the smaller the % of market share gets, the better it gets for suppliers and small business owners

Honestly I would perfer to shop at woolworths for the obvious reasons, theyre the best shop imo, but that doesnt mean I shouldnt be concerned about the power they have over suppliers and the damage they can cause to them.

Again, does it really matter how many players there are and who has what market share if customer and supplier outcomes are satisfied?

A theoretical even 4 way split between Coles/Woollies/Aldi/IGA could conceivably be no different in reality to your average shopper or farmer than what we have now.

A greater number of entrants in the market stimulates competition which is good for consumers but it also diminishes economies of scale. It's never as simple as a lot of people make out.
 
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For all the s**t that gets thrown at them they're (a) locally owned, (b) locally run, and (c) employ a shitload of Australians (about 400k taxpayers).

It's a lot better situation than many other industries such as manufacturing.

We need at least one strong industry and retail seems like it at the moment, with neither side of politics the slightest bit interested in addressing the long term future of our economy.
 

JuddsABlue

Norm Smith Medallist
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Again, does it really matter how many players there are and who has what market share if customer and supplier outcomes are satisfied?

But we already know supplier outcomes arent being met, we had a former Coles employee talk about witnessing suppliers crying as the left meetings because of the price Coles demanded they sell for. Do you think that really matters? I do.

A theoretical even 4 way split between Coles/Woollies/Aldi/IGA could conceivably be no different in reality to your average shopper or farmer than what we have now.

It may or may not be, but we wont know until we are there, and I'd hazard a guess to say it woud be better though. Whats important though in the overall balance (imo) is that a decent % of marketshare belongs to independants and smaller chains.

A greater number of entrants in the market stimulates competition which is good for consumers but it also diminishes economies of scale. It's never as simple as a lot of people make out.

Yes it does, but there is a balance, somewhere between good prices for customers, suppliers, and owners. At the moment the balance is extremely skewed to owners and customers while suppliers are being killed of. Eventually this can lead to a major lack of suppliers who have been run out of business and we are left with only Coles/Woolworths owned brands. This further skews the balance to owners, and takes away customers via our lack of options or preferred products.

I think we can all agree the balance at the moment is terrible and only getting worse, which is what we are talking about here.
 

Smiling Buddha

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It's a big stretch, but let's say we get to the point that Aldi is the dominant player and Coles and Woollies are making up the numbers like IGA and Aldi are now. Is that a better or worse scenario to be in?
We will have spent x number of years with greater competition to get to your hypothetical scenario.

Which is the whole point. Right now it is in every* peasant's interest that the duopoly be split.

Aldi offers a serious option for splitting that duopoly.

*Except, perhaps, for those with large holdings of duopoly stock, but few peasants have such large holdings.
 

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I use butchers for my meat
Fruit & vege from the Saturday farmers market
Bread the same or bakery

Rest - Coles, but refuse to buy their own brand
Looking for to some other options coming through but it could be too late

What is it now
Food, Insurance, hardware, phones,
 
So if I was to offer any suggestions to this guy running the store, if you want a better experience for customers, instead of running around stacking potatoes, when the line gets 6-8 people deep, jump behind the second register

this! it's not that hard. a separate section for self-service trolleys would be good too.
 
We need at least one strong industry and retail seems like it at the moment, with neither side of politics the slightest bit interested in addressing the long term future of our economy.
I thought retail was perpetually struggling bar the massive outlets like Coles/Woolies, and to a lesser extent Myer/DJs? Online has or was really cutting into retail's growth and sustainability.
 

DrKrieger

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With the bigger players having self checkout, people these days are quicky losing the patience of waiting around to leave.
Not sure about everyone else, but my local woolies has just modified the self serve checkout so you have to put each item on the bag area, wait for it to sense it, work out that it's the right weight, and then the light turns green and you can scan your next item. Takes about 3 seconds from putting the item on it until it registers that it's there and allows you to scan the next item. I find it hugely frustrating, and appreciate it to be honest, as it makes it much easier to go cold turkey on woolies.
 

Outshined

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May 5, 2006
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But we already know supplier outcomes arent being met, we had a former Coles employee talk about witnessing suppliers crying as the left meetings because of the price Coles demanded they sell for. Do you think that really matters? I do.

It may or may not be, but we wont know until we are there, and I'd hazard a guess to say it woud be better though. Whats important though in the overall balance (imo) is that a decent % of marketshare belongs to independants and smaller chains.

Are Aldi and Metcash really the answer? They're just comparable businesses with lesser market share and therefore lesser bargaining power. The more their market share grows, the more their bargaining power will grow and the harder they'll squeeze suppliers. They're in it for themselves too.

Yes it does, but there is a balance, somewhere between good prices for customers, suppliers, and owners. At the moment the balance is extremely skewed to owners and customers while suppliers are being killed of. Eventually this can lead to a major lack of suppliers who have been run out of business and we are left with only Coles/Woolworths owned brands. This further skews the balance to owners, and takes away customers via our lack of options or preferred products.

I think we can all agree the balance at the moment is terrible and only getting worse, which is what we are talking about here.

There is a balance but it is kept by suppliers, retailers and consumers. As a consumer the best thing you can do is vote with your feet.

How many people say things like 'I'm not sure about this $1 a litre milk business, won't somebody think of the farmers!' then go and by $1 a litre milk from Coles?
 
May 5, 2006
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We will have spent x number of years with greater competition to get to your hypothetical scenario.

Which is the whole point. Right now it is in every* peasant's interest that the duopoly be split.

Aldi offers a serious option for splitting that duopoly.

*Except, perhaps, for those with large holdings of duopoly stock, but few peasants have such large holdings.

I'm not convinced that splitting the duopoly will lead to a utopian supermarket, errr, market - but I'm all for more competition.

I reckon more people should try to bypass retailers altogether. Healthier, better, cheaper - just not as convenient.
 
I know some who tread these boards have been or are employed by these companies, what are they like as employers?

I worked for IGA and then Coles took over the store and I work for them now. IGA were better to work for as I got more hours as a casual but they also care about the staff a lot more than Coles seem to- well the Coles I work for anyway. Coles while good to us are all about the customer which is good in theory but at times can create a s**t working environment (especially if you are in a bad mood) and cause staff to be more stressed than is necessary.
 
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For all the s**t that gets thrown at them they're (a) locally owned, (b) locally run, and (c) employ a shitload of Australians (about 400k taxpayers).

That's this thing, a key source of relible income fromthe government is the taxes paid by middle income workers at places like these. THey might say they are all for small business etc, and tht might be true, but it can be harder to reliably collect tax from them.

I sometimes see very large, dominant and ubiquitous businesses like these, with the reiable tax revenue they generate, as a kind of Nationalised service by proxy.

As for my shopping:

Produce - green grocer. Tastes better, an is much much cheaper.
Then I go to Aldi for the rest - again, cheaper, quality better or equal in 90% of cases. Often get meat there as well. No preservatives and hard to get pork at butchers in my area.
Then off to Coleworths for the items I could not get elsewhere.

Used to have an IGA in walkin distance but it closed down after about a year of having 30% shelf space empty.

On occasion Igo to a different independant place, mainly if I feel like trying something different, particulalry ethnic food.
 
Further to my thoughts yesterday, how many people realise that in coles/woolies the suppliers actually pay for shelf space. To be at eye level you pay even more.

Had a sales rep of one of the smaller dip manufacturers tell us one day the prices coles wanted just to have the 'honour' of appearing on their shelves would send them out of business. Wesfarmers might appear Australian owned but they ship in all their execs and a fair chunk of their shareholders would be from overseas.

The model they are aiming for is the English Tesco model where they offer 1 premium brand and 1 house brand of every product so when you see your favourite items vanishing and more shelf space seemingly dedicated to home brands keep this in mind.
 
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