Grocery prices

Some interesting movement on grocery prices, with the ACCC report noting a lack of competition, and making some recommendations, such as unit pricing.

You know, I’m pretty sure my memory isn’t failing me in this: Safeway used to have unit pricing. I’m sure that 10 or 15 years ago, in the small print on the shelf price tags, the price per 100 grams (or whatever) was displayed.

Metcash, which distributes to IGA, was also mentioned. The Metcash head honcho was on ABC radio yesterday morning, noting that any lack of competition isn’t due to their pricing, but due to size comparative size of IGA stores compared to Coles and Safeway. I think there’s a lot to that; if all three were equidistant, I’d still go mostly to Coles or Safeway, because they have a better range.

Another caller talked about imported food sometimes being cheaper than locally-produced stuff. She was worried about the employment prospects of local workers, but I was thinking of the food miles. As a friend of mine commented recently, tinned tomatoes from Italy competing on the shelf with tinned tomatoes from the Goulburn Valley is a sign that oil prices are still too low.

Is lack of competition really the cause of rising grocery prices? With Aldi here, isn’t there more competition than before? (Though the amount of stuff they import is staggering.)

Or is it production problems? We all know about the drought. Not to mention demand for biofuels, which means less resources for food. One report says this alone has forced up global food prices by 75%.

Personally, I’d rather eat than drive any day.

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15 Replies to “Grocery prices”

  1. As with many things regarding sustainability, there are hidden depths.

    For example, depite the related GHG emissions it may be better to import some foodstuffs rather than grow them locally. Take rice for (a perhaps extreme)example. Is it better grown in wetter parts of the world and imported, than overusing our precious Australian water to grow it in a semi arid country? Growing rice requires a great deal of water and apparently produces lots of methane (GHG) too.

    On the other hand, we also have to consider security of our food supply. If we rely on imports, what happens when supplies become scarce or expense – as is starting to happen?

  2. Speaking of Aldi, there is one being built at Chadstone shopping centre where BiLo used to be. Finally there will be an Aldi close to my home.

  3. I have to say this Grocery Watch thing is a waste of money. It just confirmed what I already knew- Safeway cheaper than Coles and the ‘Independents” but Aldi cheapest. The thing with ALdi though is that they sell completely different products to those sold in COles/Safeway- you are comparing apples with oranges. I stick to Australian made and the brands I know and love- not these cheap imports that Aldi passes off as similar to mainstream brands. You get what you pay for- Aldi has much worse service, worse locations, worse range and worse products compared to Safeway and Coles.

  4. I say let there be competition!
    Would someone care to enlighten me as to why there aren’t new Australian supermarket brands emerging? Are Coles and Safeway so bloody big and fantastic that nobody can afford to muscle in with some better priced tinned ears?

  5. We need competition. These big supermarkets like Coles and Safeway are putting independent butchers and fruit shops out of business. The big supermarkets sell off-cuts of meat as premium cuts of meat (eg. mutton dressed as lamb). Grocery Watch will do nothing to bring down prices, Rudd has lied once again and backfliped on his promise. Daniel mentioned something about biofuels, I agree, we need food in our stomachs, especially at the rate I eat. But on an unrelated topic the RACV want the government to subsidise the biofuel industry, ignorant wankers.

  6. There is much more grocery compition in the US than here in Australia. Different grocery chains operate in different regions of the country. Unit pricing is in almost all stores and I often used it to compare sizes and brands for price. The larger size would not always be the cheapest per oz.(ounce) etc. Wal-Mart supercenters seem to offer the lowest prices but they have a slightly different product range than other supermarkets. I really like the fruit and produce markets as well as the butcher shops, bakeries, and specialy food stores in Melbourne. Stores such as these are rare in most parts of the US and food is obtained mostly from the local supermarket.

    I was surprised to see and be able to shop for food at a mall in Australia. I have seen supermarkets near malls in the US but never in them and certianly never a butcher or produce store.

    From what I have heard Costco is coming to Melbourne. This is a US based membership warehouse store selling a range of products for close to wholsale prices usually in large sizes suitable for a restaurant or institution. Anyone can be a member. Supposidly this will add needed compition to the Aussie gocery market.

  7. I hate grocery shopping as it is but it annoys me extra when they are out of or no longer stock stuff you need/like. Perhaps this is a sore point for me right now cos last night I discovered my Coles (Bentleigh) no longer stocks fresh chives. So then I had to go to Safeway too. Grocery shopping is bad if you have to hit 2 supermarkets to get it done… But I can’t switch to Safeway (or one of 2 IGA’s) cos I can only find other ‘must haves’ at Coles. Grrr…

  8. Thanks Peter, glad to hear we’re finally getting an Aldi close to home!
    Metcash were found to have considerably ramped up their sales prices to IGA’s and wrapped their rules up so that suppliers and IGA’s must go through Metcash.
    ACCC are investigating to see if Metcash have breached trading policy.
    Franklins in NSW broke away from Metcash some years ago and has become almost as big as Coles/Safeway in that state.
    Coles and Safeway were found to have taken out options on over 600 development sites to stop the building of any rival supermarkets in some areas which is, apparently, the only thing stopping Aldi from expanding at a faster rate.

  9. I haven’t noticed an unusually high amount of imported stuff in Aldi. And they put up posters pointing out that 100% of their dairy and 95% of meat (or the other way around) are Australian, and a similar percentage of vegetables. The bread will obviously be local too. The electronic stuff and various non-food items will all be imported, as they would be in any other shop.

    I wouldn’t call it a ‘staggering’ level of importedness.

  10. Re: unit pricing.

    Some states in the US mandate by law unit pricing. It makes it much easier when trying to figure which brand of tissue or sugar or some other staple to buy. Of course, at my coop (natural food grocery) they have bulk aisle where everything is sold by the (being the backwards States) pound. It definitely makes comparison shopping easier. And a lot less waste, especially if you bring and reuse containers.

  11. A letter to the editor in the Financial Review reported her research into the factors that affect purchasing decisions. She noted 58 (as I recall) factors involved in decisions – price was not in the top ten.

    People choose based on the brands they like, the size that suits their family (too big and you waste too much when it goes out of date), what’s available, and that sort of thing. The researcher also flagged that it is still women who do most of the shopping (although, oviously not at your place Daniel).

    More information is always good (better informed markets are generally better) but it seems to me GroceryWatch and unit pricing are an expensive way to achieve not much.

  12. Of course, at primary school our maths exercises included lots of quick questions to help us work out our own unit pricing in shops, without having to read it off a tag.

  13. I bought tinned tomatoes today, and noticed the can was not the normal design for SPC, so looked in the fine print: “… USA”.
    Of course you need water to grow tomatoes around Shep., and what didn’t we have last season?

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