Supermarket price gauging must be stopped

Photo by William West/AFP

Contributed by Jim Hayes

Woolworths and Coles, the supermarket monopolies dominating the industry, have been caught out price gauging yet again. Some of their food prices especially when it comes to fruit and vegetables, are being put up by as much as 16 percent a year and double average rise food prices.

Blame is often and wrongly put on the trifecta of the Covid pandemic, supply chain problems and the war in Ukraine.

If we look back to the Covid lockdowns, when we first experienced supply shortages and gaps on shelves. It was found then that the resulting price rises were far greater than could be justified by cost increases. The supermarkets had used the opportunity to shed staff and upscale their drive towards the just in time supply system.

Just in time means reduced warehousing to cut costs further. It also means available supplies are cut to the bone and gaps appear. The inconvenience imposed on shoppers is far less important to the share holders than the size of the dividend payouts.  

Photo from Wikipedia: Empty supermarket shelves during the Covid pandemic

A year after the lockdowns came to an end, the price gouging and shortages continue.

This business model has been extremely profitable for the supermarkets. A guardian analysis of their accounts over a five-year period showed that they were able to use the pandemic to sell more goods and do so at higher prices. They increased their profit margins, up to 30.7 percent for Woolworths and 26.5 percent for Coles.  

And the one about the Ukraine war being a major cause for higher food prices in Australia. This is greatly exaggerated. True, there has been a major increase in petrol prices. But this is because Australian prices are artificially tied to world prices. Australia is self-sufficient in petrol and the tie is unnecessary, and only there because of ongoing government policy.

This is still nowhere near enough to justify the size of the price rises.

Independent and smaller Asian supermarkets and grocers are almost always cheaper on many items, especially fruit and vegetables.

Former chair of the Australian Competition and Consumer Commission (ACCC) said last year that the two supermarket chains have little to worry about when making price decisions because they control two thirds of the market.

A significant part of the increasing cost of living is profiteering by corporations taking advantage of their monopoly position. Monopoly price gouging will continue for as long as government fails to act on the ability of monopolies to practice it.

To have any chance of a change coming about, supermarkets must be shamed. Imagine customers complaining in big numbers and going somewhere else to buy their groceries. Wouldn’t it be great to see campaigners doing their stuff outside their doors.

Maybe then the message will get through. Ripping of the public in not alright.

1 Comment on "Supermarket price gauging must be stopped"

  1. Helene Walkowsky OFS | 28 July 2023 at 1:10 pm | Reply

    I have already changed to an independent supermarket. A lot of fruit and vegetables is grown locally and is of good quality and reasonable prices. Other products too are manufactured by small local companies. Great choice of products too. And human beings at the check out!

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