I actually enjoy grocery shopping. I realise for many people, it can be tedious and time consuming and sometimes stressful, but I quite like it. I look forward to challenging myself to come in on budget, and to buy as many products as possible which are locally produced — and if not West Australian, then at least Australian.
Here’s the thing you should know about grocery shopping in Australia: there are two major supermarket chains, Coles and Woolworths. They basically have a duopoly in the supermarket business; there are a few others, but none of them has the overwhelming distribution that these two have. And as with most supermarkets, each has its own ‘home’ brand, which is sold at a very competitive price. That’s not news. What is interesting, is that in recent years, both Coles and Woolworths have been expanding their home brands, and — perhaps more importantly — improving their quality.
It used to be the case that you’d buy the home brand butter or toilet paper or baked beans because you really wanted to save money, but given the choice, you’d buy another more expensive brand, because frankly, the home brand stuff was kaka.
That’s no longer the case. Not only have they improved their basic lines, they’ve also added other ‘brands’, so that they’re now offering a cheap brand, a mid-range, and a more expensive, higher quality label. In addition, they’re branching out into organic produce, plus they’re also offering insurance and credit cards.
Now, despite the pleasure I get from grocery shopping, I’ll admit that it is sometimes difficult to fit it in around all the other household- and child-related jobs I need to accomplish. So it’s certainly very convenient that I can get almost all the things I need at one place, not to mention at low prices. That’s part of the appeal, isn’t it? It’s a one-stop-shop, and it’s marketed as that.
And there would be nothing wrong with that, only I’ve noticed something a little disturbing about the way the supermarkets’ own brands are merchandised. I guess it’s been creeping up on me without my noticing, because it only became apparent when I recently went to get milk. I was specifically there just for milk, which is unusual, so perhaps that’s why I was so observant that day. I spent some time comparing prices and checking use-by dates, as I often do. And then I realised that the supermarket brand milk took up around forty percent of the refrigerated cabinet. That’s forty percent of the cabinet which houses the fresh, fermented and flavoured milk. So that means the other fresh milk brands are sharing just over half the cabinet with other milk products.
Two thoughts sprang to mind in response to this. The first was about bulk merchandising. Back in the day when I was in retail, one of the ways in which we drew attention to products was through bulk merchandising. A classic example of this is Coca Cola. Think of the last time you were in a supermarket in the soft drinks aisle. Coke takes up a huge amount of shelf space. The red and white labels on against the dark liquid in the bottles makes for a striking contrast which catches your eye. It is something you notice even when you’re not looking for soft drink.
Bulk merchandising the store-brand milk has perhaps an even greater impact than the Coke. This is because it’s something most of us buy everyday, and while some customers have undying brand loyalty, many will buy what’s on special or what’s cheapest. If you notice one brand over the rest, and it’s cheap, chances are, you’re going to buy it.
The other issue is purely of space, which is why I noticed it. If there is less space for the other brands of milk, then fewer bottles are ordered. This means that if you normally buy a branded milk, and that one is sold out, then you must choose another brand.
Guess which brand never sells out?
After this, I began to look a little closer at some of the other departments in the supermarkets. The bakery section is overwhelmingly store-brand products. The cheapest fresh bread is the store brand one. The tinned pie apple, of all things, is no longer available in large tins, except for the store-brand. And it makes no financial sense to buy the smaller tin from the competitor, because the store brand tin is almost the same price for double the amount of apple.
This isn’t so sinister, in itself. Every business wants to make profits; every business wants to have as much of the market share as possible. Coles and Woolworths are just doing what any other business wants to do.
The trouble is, their methods are, quite possibly, a little underhand. Recently an investigation into how they negotiate contracts with suppliers has raised questions of blackmail and bullying. A 10-year milk contract between Coles and a milk-processing co-operative has been promoted as a way of giving suppliers certainty, but a cynic might view this as piecemeal, given the way in which these supermarkets can essentially dictate the success or failure of individual suppliers. There are also some concerns about how the volatility of the market will affect such a long-running contract.
It makes me ache a little to realise just how much we have allowed large companies to take control of what we buy. We no longer need to go to several different shops to get what we need, and that’s very convenient, but at what price is this happening? When there is a supermarket brand product in every category, is that really choice? Or does it mean that they can start pushing out other brands until we don’t have a choice but to buy theirs? And what happens, if we are then unhappy with that brand? Where is the choice, then?
This kind of business model is certainly not unique to us here in Australia, and that fact both saddens and delights me. It’s upsetting to think that we have allowed big business to get this far, and that we accept a kind of ‘market will prevail’ philosophy. The market in this case is not fair, in the same way that a match between a bantamweight and a heavyweight would not be fair. I’m sad to think that we allow this to happen without thinking of the long term consequences.
But I’m also confident that consumers can turn this around. Farmers’ markets, boutique stores, a focus on customer service and niche goods — all of these are ways in which small businesses can push back against a powerful supermarket chain. And they are pushing back. It’s up to us as consumers to decide where we stand. Will we stick with the store-brand goods, or will we choose to pay a little extra to support a different business? Granted, economic situations sometimes limit our choices, but while we’re still spending money, we’re still making choices.
It’s up to us, to choose wisely, because if we don’t, we may find ourselves with very little choice at all.