tag:theconversation.com,2011:/africa/topics/coles-1620/articlesColes – The Conversation2024-02-27T10:02:25Ztag:theconversation.com,2011:article/2238212024-02-27T10:02:25Z2024-02-27T10:02:25ZWorried about price gouging? For banks, there’s a simple solution<p>Does it feel like you’re being charged more for all sorts of things these days, from <a href="https://theconversation.com/supermarkets-airlines-and-power-companies-are-charging-exploitative-prices-despite-reaping-record-profits-222755#:%7E:text=According%20to%20the%20inquiry%2C%20the,dairy%20products%20and%20breakfast%20cereals.&text=Farmers%20recently%20accused%20supermarkets%20of%20making%20too%20much%20profit%20from%20their%20crops.">groceries</a> to <a href="https://theconversation.com/see-when-australias-biggest-banks-stopped-paying-proper-interest-on-your-savings-and-what-you-can-do-about-it-200265">banking</a>? Turns out, you’re right.</p>
<p>While we might be more likely to remember prices that go up than prices that go down, the very best evidence – assembled by Australia’s <a href="https://treasury.gov.au/sites/default/files/2023-11/competition-review-mergers-background-note.pdf">Treasury</a>, the federal government’s lead economic adviser – says your suspicions are right. We really are being charged more than we used to be two decades ago.</p>
<p>Coupled with the latest profit reports from Australia’s biggest supermarkets and banks, including Tuesday’s half-year results from Coles, it suggests we are contributing more to company profits than we used to.</p>
<h2>Climbing price markups</h2>
<p>The Treasury estimates show in the 13 years between 2003-04 and 2016-17, the average price markup – the difference between the cost of a product and its selling price – across all Australian industries climbed 6%. </p>
<p>That’s extra profit, taken from your wallet, going to the people selling you things. </p>
<p>Those Treasury estimates are contained in a background paper prepared for the competition <a href="https://treasury.gov.au/review/competition-review-2023">inquiry</a> being undertaken by a panel including Productivity Commission chair Danielle Wood, former Competition and Consumer Commission chief Rod Sims, and business leader David Gonski.</p>
<p>At the same time, the average share of each industry held by its biggest four firms edged up from 41% to 43%. </p>
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<a href="https://theconversation.com/see-when-australias-biggest-banks-stopped-paying-proper-interest-on-your-savings-and-what-you-can-do-about-it-200265">See when Australia's biggest banks stopped paying proper interest on your savings – and what you can do about it</a>
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<p>Profit margins are also higher here than in more competitive markets overseas. </p>
<p>This is true in banking, where the big four have taken over St George, BankWest, and the Bank of Melbourne – and are about to take over <a href="https://www.accc.gov.au/media-release/australian-competition-tribunal-authorises-anz%E2%80%99s-proposed-acquisition-of-suncorp-bank">Suncorp</a>. </p>
<p>It’s also true in supermarkets, where the big two, Woolworths and Coles, have taken over or seen off Franklins, Bi-Lo and Safeway.</p>
<h2>Bigger profit margins than overseas</h2>
<p>Coles supermarkets reported earnings <a href="https://www.investopedia.com/terms/e/ebitda.asp#:%7E:text=EBITDA%2C%20or%20earnings%20before%20interest,generated%20by%20the%20company's%20operations.">before adjustments</a> of <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02777616-3A637432">A$1.73 billion</a> on sales of $19.778 billion in the half year to December – a profit margin of 8.7%.</p>
<p>Last week, Woolworths supermarkets reported earnings of <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02774826-2A1506104">$2.45 billion</a> on sales of $25.648 billion – a margin of 9.6%.</p>
<p>By way of comparison, the dominant UK supermarket group, Sainsbury’s, has a profit margin of <a href="https://stockanalysis.com/quote/lon/SBRY/statistics/">6.13%</a>.</p>
<p>In banking, the Commonwealth Bank has just reported a return on equity (profit as a proportion of shareholders’ funds) of <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02772167-2A1504649">13.8%</a>. National Australia Bank reported <a href="https://www.nab.com.au/content/dam/nab/documents/reports/corporate/2023-full-year-results.pdf">12.9%</a>. </p>
<p>While on a par with the big banks overseas, those recent returns are a good deal higher than CommBank’s <a href="https://www.commbank.com.au/content/dam/commbank-assets/about-us/2021-08/2021-annual-report_spreads.pdf">11.5%</a> and NAB’s <a href="https://www.nab.com.au/content/dam/nab/documents/reports/corporate/2021-full-year-results-management-discussion-and-analysis.pdf">10.7%</a> reported two years ago.</p>
<h2>Little hope for groceries</h2>
<p>For supermarkets, there’s not a lot the government can do, apart from launching an <a href="https://www.accc.gov.au/inquiries-and-consultations/supermarkets-inquiry-2024-25">inquiry</a>, and perhaps giving Australian authorities the power to <a href="https://www.afr.com/policy/economy/break-up-firms-that-abuse-market-power-says-former-competition-tsar-20230709-p5dmtq">break up</a> firms that abuse their market power.</p>
<p>But Prime Minister Anthony Albanese has said he isn’t keen on giving Australian authorities the sort of powers available to authorities in the United States and the United Kingdom, saying (incongruously) Australia is “<a href="https://www.pm.gov.au/media/radio-interview-abc-radio-brisbane-mornings">not the old Soviet Union</a>”.</p>
<p>And doing anything short of that would be unlikely to have much effect. Australia’s two supermarket giants have invested a fortune in high-tech <a href="https://theconversation.com/coles-and-woolworths-are-moving-to-robot-warehouses-and-on-demand-labour-as-home-deliveries-soar-166556">warehouses and distribution systems</a>, which new rivals would be hard-pressed to match.</p>
<h2>Hope for more competitive banking</h2>
<p>But for banks it’s altogether different. Richard Denniss of the Australia Institute has come up with the idea, and it’s a beauty. </p>
<p>It’s for the government to provide a low-cost banking service – expanding on services it already offers.</p>
<p>The costs would be so low, other banks might decide to add features and resell them in the same way as resellers sell <a href="https://www.whistleout.com.au/MobilePhones/Guides/Telstra-network-coverage-vs-ALDI-Woolworths-Belong-Boost">mobile phone</a> and <a href="https://www.nbnco.com.au/residential/service-providers">NBN</a> services.</p>
<p>The primary function of any bank is to provide a numbered account into which Australians can deposit and withdraw funds.</p>
<p>The Australian Tax Office does this already, at an incredibly low cost. </p>
<p>The tax office gives every working Australian a <a href="https://www.ato.gov.au/individuals-and-families/tax-file-number">tax file number</a>. Employers deposit money into these accounts, and – should the tax office owe a refund – taxpayers withdraw them. </p>
<p>Some taxpayers ensure their tax is <a href="https://www.ato.gov.au/businesses-and-organisations/international-tax-for-business/in-detail/income/refund-of-over-withheld-withholding-how-to-apply">overpaid</a>, so they withdraw later.</p>
<p>Denniss describes it as a bank account with the world’s clumsiest interface.</p>
<h2>The government could offer bank loans</h2>
<p>It wouldn’t be much of a stretch from improving that interface to offering government loans. </p>
<p>In fact, government loans are already provided in some circumstances: such as to retirees with home equity through the <a href="https://www.dss.gov.au/our-responsibilities/seniors/benefits-payments/home-equity-access-scheme">home equity access scheme</a>, and to Centrelink recipients through <a href="https://www.servicesaustralia.gov.au/centrelink-online-account-help-apply-for-advance-payment">advance payments</a>.</p>
<p>It woudn’t be much more of stretch to provide loans more broadly, at an incredibly low administrative cost. The government already lends against the <a href="https://www.servicesaustralia.gov.au/who-can-get-loan-under-home-equity-access-scheme">value of homes</a>.</p>
<p>Back in the days when the federal government owned the <a href="https://www.commbank.com.au/about-us/our-company/history.html">Commonwealth Bank</a>, it had to cover the high costs of running bricks and mortar branches.</p>
<p>Freed from those costs, the government could now offer a low-cost, technology-enabled basic banking service that would tempt us away from the big four banks – unless they offered better value.</p>
<p>Of course it would cost money, although a lot of it has already been spent setting up the system of tax file numbers and accounts. And of course the banks would hate the idea. That would be the point. </p>
<p>But doing what we can to stop Australians being overcharged is important, not only for wage earners but also for businesses.</p>
<p>The <a href="https://treasury.gov.au/review/competition-review-2023">competition inquiry</a> the government has launched is a good start. It shouldn’t be frightened about where it might lead.</p><img src="https://counter.theconversation.com/content/223821/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Martin is Economics Editor of The Conversation. </span></em></p>We really are being charged more than we used to be. If the government is concerned about price gouging, it could try this bold idea: offering its own low-cost bank loans.Peter Martin, Visiting Fellow, Crawford School of Public Policy, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2240762024-02-22T19:21:05Z2024-02-22T19:21:05ZThe secret sauce of Coles’ and Woolworths’ profits: high-tech surveillance and control<p>Coles and Woolworths, the supermarket chains that together control <a href="https://www.abc.net.au/news/2024-02-20/woolworths-coles-supermarket-tactics-grocery-four-corners/103405054">almost two-thirds</a> of the Australian grocery market, are facing unprecedented scrutiny. </p>
<p>One recent inquiry, commissioned by the Australian Council of Trade Unions and led by former Australian Consumer and Competition Commission chair Allan Fels, found the pair engaged in unfair pricing practices; an ongoing <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Supermarket_Prices/SupermarketPrices">Senate inquiry into food prices</a> is looking at how these practices are linked to inflation; and the ACCC has just begun <a href="https://www.accc.gov.au/inquiries-and-consultations/supermarkets-inquiry-2024-25">a government-directed inquiry</a> into potentially anti-competitive behaviour in Australia’s supermarkets. </p>
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Read more:
<a href="https://theconversation.com/8-ways-woolworths-and-coles-squeeze-their-suppliers-and-their-customers-223857">8 ways Woolworths and Coles squeeze their suppliers and their customers</a>
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<p>Earlier this week, the two companies also came under the gaze of the <a href="https://www.abc.net.au/news/2024-02-19/super-power-the-cost-of-living-with-coles-and-woolworths/103486508">ABC current affairs program Four Corners</a>. Their respective chief executives each gave somewhat prickly interviews, and Woolworths chief Brad Banducci <a href="https://www.abc.net.au/news/2024-02-21/woolworths-ceo-brad-banducci-retirement-four-corners/103493418">announced his retirement</a> two days after the program aired.</p>
<p>A focus on the power of the supermarket duopoly is long overdue. However, one aspect of how Coles and Woolworths exercise their power has received relatively little attention: a growing high-tech infrastructure of surveillance and control that pervades retail stores, warehouses, delivery systems and beyond.</p>
<h2>Every customer a potential thief</h2>
<p>As the largest private-sector employers and providers of essential household goods, the supermarkets play an outsized role in public life. Indeed, they are such familiar places that technological developments there may fly under the radar of public attention.</p>
<p>Coles and Woolworths are both implementing technologies that treat the supermarket as a “problem space” in which workers are controlled, customers are tracked and profits boosted.</p>
<p>For example, in response to a purported spike in shoplifting, a raft of customer surveillance measures have been introduced that treat every customer as a potential thief. This includes <a href="https://www.news.com.au/lifestyle/food/eat/coles-introducing-new-technology-which-will-track-shoppers-every-move/news-story/86ea8d330f76df87f2235eeda4d1136e">ceiling cameras</a> which assign a digital ID to individuals and track them through the store, and <a href="https://www.thenewdaily.com.au/finance/consumer/2023/08/16/smart-gate-technology">“smart” exit gates</a> that remain closed until a purchase is made. Some customers have reported being “<a href="https://7news.com.au/lifestyle/coles-supermarketshoppers-dramatic-checkout-experience-goes-viral-i-was-trapped-c-12977760">trapped</a>” by the gate despite paying for their items, causing significant embarrassment.</p>
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<a href="https://images.theconversation.com/files/577235/original/file-20240222-22-8d21o0.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A grainy security camera image from above a self-checkout area showing areas outlined in yellow." src="https://images.theconversation.com/files/577235/original/file-20240222-22-8d21o0.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/577235/original/file-20240222-22-8d21o0.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=360&fit=crop&dpr=1 600w, https://images.theconversation.com/files/577235/original/file-20240222-22-8d21o0.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=360&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/577235/original/file-20240222-22-8d21o0.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=360&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/577235/original/file-20240222-22-8d21o0.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=452&fit=crop&dpr=1 754w, https://images.theconversation.com/files/577235/original/file-20240222-22-8d21o0.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=452&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/577235/original/file-20240222-22-8d21o0.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=452&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Woolworths surveillance cameras monitor the self-checkout area.</span>
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<p>At least one Woolworths store has <a href="https://www.news.com.au/finance/business/woolies-in-wetherill-park-fitted-with-500-tiny-cameras-to-monitor-stock-levels/news-story/585de8c741ae9f520adcc4005f2a736a">installed 500 mini cameras</a> on product shelves. The cameras monitor real-time stock levels, and Woolworths says customers captured in photos will be silhouetted for privacy.</p>
<p>A Woolworths spokesperson <a href="https://www.smh.com.au/national/nsw/up-to-70-cameras-watch-you-buy-groceries-what-happens-to-that-footage-20230819-p5dxtp.html">explained</a> the shelf cameras were part of “a number of initiatives, both covert and overt, to minimise instances of retail crime”. It is unclear whether the cameras are for inventory management, surveillance, or both.</p>
<p>Workers themselves are being fitted with body-worn cameras and wearable alarms. Such measures may protect against customer aggression, which is a <a href="https://www.abc.net.au/news/2023-11-22/retail-union-staff-abuse-cost-of-living-christmas/103117014">serious problem facing workers</a>. Biometric data collected this way could also be used to discipline staff in what scholars Karen Levy and Solon Barocas refer to as “<a href="https://ijoc.org/index.php/ijoc/article/view/7041">refractive surveillance</a>” – a process whereby surveillance measures intended for one group can also impact another.</p>
<h2>Predicting crime</h2>
<p>At the same time as the supermarkets ramp up the amount of data they collect on staff and shoppers, they are also investing in data-driven “crime intelligence” software. Both supermarkets have <a href="https://www.smartcompany.com.au/industries/information-technology/grocery-chains-surveillance-tech-auror/">partnered with New Zealand start-up Auror</a>, which shares a name with the magic police from the Harry Potter books and claims it can <a href="https://www.auror.co/retail-crime-intelligence#What-is-Retail-Crime-Intelligence">predict crime before it happens</a>.</p>
<p>Coles also recently began a partnership with Palantir, a global data-driven surveillance company that takes its name from magical crystal balls in The Lord of the Rings.</p>
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Read more:
<a href="https://theconversation.com/solving-the-supermarket-why-coles-just-hired-us-defence-contractor-palantir-222883">Solving the supermarket: why Coles just hired US defence contractor Palantir</a>
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<p>These heavy-handed measures seek to make self-service checkouts more secure without increasing staff numbers. This leads to something of a vicious cycle, as under-staffing, self-checkouts, and high prices are often <a href="https://www.aap.com.au/news/retail-workers-facing-increased-violence-and-abuse/">causes of customer aggression</a> to begin with. </p>
<p>Many staff are similarly frustrated by <a href="https://www.theguardian.com/business/2023/jun/05/coles-woolworths-court-accused-of-underpaying-workers">historical wage theft by the supermarkets</a> that totals hundreds of millions of dollars. </p>
<h2>From community employment to gig work</h2>
<p>Both supermarkets have brought the gig economy squarely <a href="https://theconversation.com/coles-uber-eats-deal-brings-the-gig-economy-inside-the-traditional-workplace-204353">inside the traditional workplace</a>. Uber and Doordash drivers are now part of the infrastructure of home delivery, in an attempt to push last-mile delivery costs onto gig workers. </p>
<p>The precarious working conditions of the gig economy are well known. Customers may not be aware, however, that Coles recently increased Uber Eats and Doordash prices by at least 10%, and will <a href="https://7news.com.au/lifestyle/shoppers-slam-coles-over-major-change-to-half-price-buys-that-will-affect-millions-c-12860556">no longer match in-store promotions</a>. Drivers have been instructed to dispose of the shopping receipt and should no longer place it in the customer’s bag at drop-off. </p>
<p>In addition to higher prices, customers also pay service and delivery fees for the convenience of on-demand delivery. Despite the price increases to customers, drivers I have interviewed in my ongoing research report they are earning less and less through the apps, often well below Australia’s minimum wage.</p>
<p>Viewed as a whole, Coles’ and Woolworths’ high-tech measures paint a picture of surveillance and control that exerts pressures on both customers and workers. While issues of market competition, price gouging, and power asymmetries with suppliers must be scrutinised, issues of worker and customer surveillance are the other side of the same coin – and they too must be reckoned with.</p><img src="https://counter.theconversation.com/content/224076/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Lauren Kate Kelly receives funding from the Australian Research Council (ARC) and the ARC Centre of Excellence for Automated Decision-Making and Society. She works with United Workers Union which has members across the supermarket supply chain.</span></em></p>The hidden side of the supermarket giants’ quest for profits is an increasingly elaborate system for monitoring and managing shoppers and workers.Lauren Kate Kelly, PhD Candidate, ARC Centre of Excellence for Automated Decision-Making and Society, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2238572024-02-20T06:09:16Z2024-02-20T06:09:16Z8 ways Woolworths and Coles squeeze their suppliers and their customers<p>To hear the Woolworths and Coles chief executives speak on <a href="https://www.abc.net.au/news/2024-02-19/super-power-the-cost-of-living-with-coles-and-woolworths/103486508">Four Corners</a> this week, you’d think their industry was highly competitive.</p>
<p>For instance, Woolies’ chief Brad Banducci said:</p>
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<p>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</p>
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<p>Meanwhile, Coles’ chief Leah Weckert said:</p>
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<p>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 </p>
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<p>Between them, Coles and Woolworths control <a href="https://www.abc.net.au/news/2024-02-20/woolworths-coles-supermarket-tactics-grocery-four-corners/103405054">65%</a> of Australia’s grocery market. Aldi has just 10%, and independents such as IGA have the rest. </p>
<p>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. </p>
<p>But having a large market share isn’t the same as unreasonably using it. </p>
<p>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 <a href="https://www.accc.gov.au/inquiries-and-consultations/supermarkets-inquiry-2024-25">inquiry</a> into supermarkets.</p>
<p>Many hurt their suppliers more than their customers.</p>
<h2>1. Squeezing farmers</h2>
<p>Hundreds of farmers have little choice but to sell their crops to the big two, and little choice but to accept whatever is offered.</p>
<p>One cherry farmer sent 15 tonnes of cherries to Coles – an entire semi-trailer load. He hoped to receive A$90,000. </p>
<p>Instead, he was told the fruit was not up to standard and was only able to get $5,800 on the seconds market.</p>
<p>He said when Coles is dealing with thousands and thousands of pieces of fruit, it can pick out ten pieces and say the consignment is no good.</p>
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<p>so that is power, that’s market power when you can simply reject something for no great reason</p>
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<p>The behaviour described might amount to “<a href="https://en.wikipedia.org/wiki/Competition_and_Consumer_Act_2010">misuse of market power</a>” under the Competition and Consumer Act 2010. </p>
<h2>2. Demanding money to accept price increases</h2>
<p>Four Corners told the story of a supplier who asked to be paid 5% more and was told the request would be approved only if he paid Coles A$25,000.</p>
<p>The lump sum was for promotions. </p>
<p>It said the Coles buyer’s initial desire to keep prices low for the consumer had been “quickly forgotten”.</p>
<p>The supplier said if he wasn’t prepared to do what the supermarket wanted, there was “a lot of intimidation”.</p>
<p>The tools used included deleting suppliers’ products from sale, forcing customers to buy their competitors’ products. </p>
<p>While this behaviour appears not to be illegal, it might worry the Australian Competition and Consumer Commission.</p>
<h2>3. Charging for Coles Radio</h2>
<p>Four Corners said suppliers wanting to do business with the big two were asked to pay for in-house advertising. </p>
<p>It quoted the cost of a full-page ad in Woolworths’ Fresh Magazine at $30,000, and the cost of a four-week spot on Coles radio at $28,000.</p>
<p>Suppliers were also expected to meet the cost of special discounts rather than the supermarket. That means suppliers need to set their recommended retail price at a higher level than was needed in order to offer periodic discounts.</p>
<p>While quite legal, this behaviour has the effect of forcing up general prices. It would be illegal if it misrepresented ordinary prices. </p>
<h2>4. Matching prices</h2>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/576669/original/file-20240220-20-rnn4ko.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Photo of prices being changed" src="https://images.theconversation.com/files/576669/original/file-20240220-20-rnn4ko.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/576669/original/file-20240220-20-rnn4ko.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/576669/original/file-20240220-20-rnn4ko.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/576669/original/file-20240220-20-rnn4ko.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/576669/original/file-20240220-20-rnn4ko.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/576669/original/file-20240220-20-rnn4ko.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/576669/original/file-20240220-20-rnn4ko.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<p>The supermarket giants monitor each other’s pricing very closely. If one changes its prices, the other follows.</p>
<p>A former category manager for Coles and Woolworths said if one put up a price, the other would quickly follow.</p>
<p>He said if you did five shops in Woolworths and five in Coles and spent around a hundred dollars, there would only be a few cents difference.</p>
<p>The behaviour might be the result of intense price competition of the kind the Commission wants to encourage, or it might be the result of an implicit understanding between the big two not to compete on price, something the Commission will be keen to determine.</p>
<h2>5. Blaming inflation</h2>
<p>Woolworths’ latest <a href="https://www.woolworthsgroup.com.au/content/dam/wwg/investors/reports/2023/f23-full-year/Woolworths%20Group%202023%20Annual%20Report.pdf">annual report</a> shows its cost of doing business was flat, but its profit margin from selling groceries climbed from 5.3% to 6%, which meant an extra $318 million in profits.</p>
<p>An industry insider told Four Corners that the big two used “the cover of inflation” to raise prices, something each denied.</p>
<p>Woolworths said its price increases were legitimate, pointing to increases in the price of fertiliser, international freight, wages, and the cost of disruptions in obtaining goods.</p>
<p>Even if unjustified, there is nothing illegal about raising prices, unless false representations are made about the reasons, which is something the Commission will want to examine. </p>
<h2>6. Banking land</h2>
<p>An industry insider told Four Corners the big two buy up “spoiler sites” years before they even get approvals to build.</p>
<p>If they get the green light, it’s a new supermarket. If not, they’ve kept their rivals out.</p>
<p>In one growing community west of Brisbane, Woolworths bought more than 6 hectares of land over 11 years. But a supermarket is still years away.</p>
<p>German supermarket giant Kaufland abandoned plans to enter the Australian market in 2020. Media reports said a lack of suitable sites was one factor.</p>
<p>The Commission would be hard-pressed to find such behaviour was illegal unless it was able to make a case that it significantly lessened competition.</p>
<h2>7. Dark stores</h2>
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<a href="https://images.theconversation.com/files/576677/original/file-20240220-18-miohox.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Photo of worker in hi-vis jacket picking stock" src="https://images.theconversation.com/files/576677/original/file-20240220-18-miohox.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/576677/original/file-20240220-18-miohox.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/576677/original/file-20240220-18-miohox.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/576677/original/file-20240220-18-miohox.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/576677/original/file-20240220-18-miohox.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/576677/original/file-20240220-18-miohox.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/576677/original/file-20240220-18-miohox.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<p>Delivery and click-and-collect orders sometimes come from “dark stores” without customers in which stock pickers work at speed in what can be stifling heat.</p>
<p>“There is an industry standard of a pick rate of about 180 items per hour,” one stock picker said. “Our warehouse, particularly during busy periods, will push you to go above and beyond that, which might be 210, 220.”</p>
<p>In the past, the names of pickers who fell behind were displayed in red.</p>
<blockquote>
<p>Every summer there’s people who feel dizzy, every summer there’s people whose sweat’s just dripping off them and they want to sit down, but you get a 15-minute break in a five-hour shift</p>
</blockquote>
<p>While not infringing on competition law, such behaviour might breach industrial laws. The Commission is likely to find it beyond the scope of its inquiry.</p>
<h2>8. A conduct code with no penalty</h2>
<p>Former Australian Competition and Consumer Commission Chairman Rod Sims, described the Food and Grocery Code of Conduct as a “joke” because it had no penalties. </p>
<p>He said it was like having a speed limit of 60 kilometres an hour with no penalty for driving at 80.</p>
<p>Woolworths conceded it hadn’t received a single complaint under the grocery code of conduct in the past year. Asked why, chief executive Brad Banducci said Four Corners should ask suppliers.</p>
<p>Only one continuing supplier agreed to appear in the program on the condition that the appearance was anonymous.</p>
<p>The Commission is certain to recommend that the code be given teeth.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1759391473567490367"}"></div></p>
<h2>Over to the Commission</h2>
<p>The Competition and Consumer Commission’s investigation is likely to confirm that Australian supermarkets have some of the highest profit margins in the world, deriving in large part from their high market share.</p>
<p>At issue will be what this enables them to do to their suppliers and customers.</p>
<p>The Commission will publish an <a href="https://www.accc.gov.au/inquiries-and-consultations/supermarkets-inquiry-2024-25">issues paper</a> this month and report to the government in August.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/why-prices-are-so-high-8-ways-retail-pricing-algorithms-gouge-consumers-223310">Why prices are so high – 8 ways retail pricing algorithms gouge consumers</a>
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<img src="https://counter.theconversation.com/content/223857/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sanjoy Paul does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Suppliers and customers are squeezed harder in Australia than in other countries because Coles and Woolworths control 65% of the market.Sanjoy Paul, Associate Professor, UTS Business School, University of Technology SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2232322024-02-14T19:21:22Z2024-02-14T19:21:22ZSoft plastic recycling is back after the REDcycle collapse – but only in 12 supermarkets. Will it work this time?<figure><img src="https://images.theconversation.com/files/575297/original/file-20240213-28-kni29l.jpg?ixlib=rb-1.1.0&rect=33%2C20%2C4459%2C2923&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/colorful-used-plastic-bags-backlit-pattern-1618595941">Mykolastock, Shutterstock</a></span></figcaption></figure><p>After the memorable <a href="https://www.smh.com.au/national/fire-signalled-fatal-end-to-coles-and-woolies-plastic-recycling-program-20221109-p5bwqb.html">collapse of Australia’s largest soft plastic recycling program REDcycle</a> in late 2022, a new scheme is emerging. It’s remarkably similar, albeit on a much smaller scale. </p>
<p>The trial underway in <a href="https://www.theguardian.com/australia-news/2024/feb/09/woolworths-coles-and-aldi-to-roll-out-soft-plastics-collection-bins-in-12-melbourne-stores">12 Melbourne supermarkets</a> intends, once again, to provide customers with an in-store option for recycling “scrunchable” food packaging.</p>
<p>It’s estimated Australia uses <a href="https://www.dcceew.gov.au/environment/protection/waste/publications/national-plastics-plan-summary">more than 70 billion pieces</a> of soft plastic a year. Most of it still ends up in landfill or blows into streets and waterways, <a href="https://www.science.org/doi/10.1126/sciadv.1700782">polluting our rivers and oceans</a>. So 12 stores won’t cut it in the long term. </p>
<p>But starting small is a good idea. REDcycle collapsed under its own weight, stockpiling recyclable material with nowhere to go. The new scheme will feed new, purpose-built waste processing facilities so it has much better prospects. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1756796379425583467"}"></div></p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/redcycles-collapse-is-more-proof-that-plastic-recycling-is-a-broken-system-194528">REDcycle's collapse is more proof that plastic recycling is a broken system</a>
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<h2>What do we know about the new scheme?</h2>
<p>Australia’s <a href="https://www.woolworthsgroup.com.au/content/dam/wwg/sustainability/documents/Taskforce%20Roadmap%20-%20Final%20v2.docx.pdf">Soft Plastics Taskforce</a> is behind the new trial. The taskforce is a coalition of the three major supermarkets: Woolworths, Coles and Aldi. It was established in the wake of REDcycle’s demise and is chaired by the federal government Department of Climate Change, Energy, the Environment and Water.</p>
<p>The taskforce assumed responsibility for roughly 11,000 tonnes of soft plastic, formerly managed by REDcycle, across 44 locations <a href="https://www.abc.net.au/news/2023-11-30/redcycle-soft-plastics-recycling-update/103135156">across Australia</a>. </p>
<p>Addressing the lack of soft plastics recycling infrastructure in Australia is a top priority. This is the main reason REDcycle was unable to process the mountains of soft plastics it had stored around the country.</p>
<p>Much like the original REDcycle scheme, the new small-scale trial in Victoria has identified <a href="https://www.theguardian.com/australia-news/2024/feb/09/woolworths-coles-and-aldi-to-roll-out-soft-plastics-collection-bins-in-12-melbourne-stores">several potential end markets</a> for used soft plastic. <a href="https://www.woolworthsgroup.com.au/content/dam/wwg/sustainability/documents/Taskforce%20Roadmap%20-%20Final%20v2.docx.pdf">After treatment</a>, it could become an additive for asphalt roads, a replacement for aggregate in concrete, or a material for making shopping trolleys and baskets. </p>
<p>To be a successful and lasting solution, the scheme must be cost-effective and suitably located, with established markets for the recycled products.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1753224367754883434"}"></div></p>
<h2>Why are soft plastics so difficult to recycle?</h2>
<p>Recycling soft plastic packaging is <a href="https://pubs.acs.org/doi/full/10.1021/acsapm.1c00648?casa_token=euz2ItVOSfgAAAAA%3Ax6rHJAiZUkLUPQZTDJFLG1gnJ1R-41qVXxnl6jXg9_QdcaQ9GDBI5OzLtRyGCz5LMF4kZQ4KFYSfyA">particularly challenging</a>, for several reasons. </p>
<p>Plastic packaging is typically made from the petrochemicals <a href="https://www.sciencedirect.com/science/article/pii/S0048969718307307">polyethylene or polypropylene</a>, and often contains a mix of materials, including various types of plastics and additives for flexibility and durability. This blend of materials makes it difficult to separate and recycle effectively. </p>
<p>To make matters worse, soft plastics readily absorb residues from food, grease and other substances. This causes contamination, <a href="https://www.csiro.au/en/news/All/Articles/2022/November/soft-plastics-recycling">reducing the quality of the recycled material</a>. </p>
<p>There’s also less demand for recycled soft plastics, compared to other plastics. Many manufacturers prefer using brand new or “virgin” plastics or recycled rigid plastics instead, such as <a href="https://link.springer.com/article/10.1007/s42824-020-00014-y">recycled polyethylene terephthalate (rPET)</a>, leaving limited avenues for recycled soft plastics to find new uses. </p>
<p>Soft plastics can get tangled or stuck in machinery at recycling or waste-processing facilities, causing <a href="https://onlinelibrary.wiley.com/doi/full/10.1002/marc.202000415">inefficiencies and disruptions in the process</a>.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/3-little-known-reasons-why-plastic-recycling-could-actually-make-things-worse-206060">3 little-known reasons why plastic recycling could actually make things worse</a>
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<h2>Finding local solutions</h2>
<p>We need to make it economically viable to recycle low-value plastics such as soft plastic packaging. Placing recycling facilities closer to communities and transport can save money and reduce emissions. So local, decentralised, small-scale recycling or reprocessing infrastructure is the way to go. </p>
<p>Fit-for-purpose facilities can develop the specialised processing and manufacturing techniques needed to handle soft plastics. This takes care of the contamination problem and creates new options for developing recycled products. </p>
<p>Local recycling initiatives also foster community engagement and awareness. We need to encourage individuals to participate actively in recycling efforts, and foster local businesses focused on resource recovery. To this end, we are currently exploring innovative enterprise-based recycling solutions in remote First Nations communities in Queensland.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1752271435668615358"}"></div></p>
<h2>The high cost of cheap packaging</h2>
<p>Soft plastics are lightweight, flexible and inexpensive to produce. This has made them popular choices for packaging. But this ignores the problems of disposal, including harm to nature and people. There <a href="https://www.ellenmacarthurfoundation.org/the-new-plastics-economy-rethinking-the-future-of-plastics">has to be a better way</a>. </p>
<p>Recycling soft plastic packaging does face numerous obstacles. These stem from complex composition, contamination risks, sorting and processing challenges, scarce recycling infrastructure and limited demand for the end product. </p>
<p>Tackling these challenges requires collaborative efforts from industry players, policymakers, consumers and researchers. We need to develop innovative local solutions and reduce consumption of single-use plastic. </p>
<p>Holding producers accountable for the end-of-life management of their products is paramount. In the meantime, local, decentralised recycling infrastructure offers a promising solution to improve the efficiency and sustainability of soft plastic recycling, while empowering communities to contribute to a circular economy.</p>
<p>The trial in Victoria raises hopes of a working solution for post-consumer soft plastic. This time they are starting on a small scale. That should make it easier to manage the volume of material available for recycling and avoid secret stockpiles. Ultimately this approach could see “micro-factories” cropping up across the country, turning what was once waste into viable, useful products. </p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/we-need-a-global-treaty-to-solve-plastic-pollution-acid-rain-and-ozone-depletion-show-us-why-207622">We need a global treaty to solve plastic pollution – acid rain and ozone depletion show us why</a>
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<img src="https://counter.theconversation.com/content/223232/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Anya Phelan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Australia’s Soft Plastics Taskforce has been under pressure to fill the vacuum left by the demise of REDcycle. But this time the small trial announced for Melbourne has the potential to succeed.Anya Phelan, Senior Lecturer in Entrepreneurship & Innovation, Griffith UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2228832024-02-08T03:40:45Z2024-02-08T03:40:45ZSolving the supermarket: why Coles just hired US defence contractor Palantir<p>What does the Australian supermarket chain Coles have in common with the CIA? As of last week, both are clients of <a href="https://www.palantir.com/about/">Palantir Technologies</a>, a US tech company “focused on creating the world’s best user experience for working with data”.</p>
<p>In a three-year deal, Coles plans to deploy Palantir’s tools across more than 840 supermarkets to <a href="https://www.afr.com/world/north-america/coles-brings-in-pentagon-s-palantir-for-cost-cutting-20240202-p5f1tq">cut costs</a> and “redefine how we think about our workforce”. </p>
<p>The tech company, named after magical seeing stones from the Lord of the Rings, offers comprehensive software that collects, organises and visualises a client’s data in “<a href="https://hcommons.org/deposits/item/hc:34683/">one platform to rule them all</a>”. For an intelligence agency, Palantir’s tools might help <a href="https://www.youtube.com/watch?v=QIT4hv4tnek">identify a terror cell</a> through phone calls and financial transactions; in a healthcare organisation, they might find ways to save money by <a href="https://www.youtube.com/watch?v=tljWVIUbulg">shortening emergency department stays</a>.</p>
<p>For Coles, the <a href="https://www.businesswire.com/news/home/20240201306532/en/Palantir-Partners-with-One-of-Australia%E2%80%99s-Leading-Retailers">goal</a> is to “optimise its workforce” by analysing “over 10 billion rows of data, comprising each store, team member, shift and allocation across all intervals in a day, every day”. </p>
<p>The announcement is <a href="https://www.itnews.com.au/news/coles-to-run-palantir-analytics-suite-across-its-supermarkets-604698">linked</a> to Coles’ plan to save a billion dollars over the next four years, and follows a 2019 <a href="https://news.microsoft.com/en-au/features/coles-takes-trip-down-the-aisles-with-microsoft/">big data deal with Microsoft</a>, an effort to build <a href="https://www.afr.com/companies/retail/coles-faces-ocado-delivery-and-cost-blowout-20230818-p5dxik">robotic delivery centres</a>, and the introduction of <a href="https://www.news.com.au/finance/business/retail/experts-warn-about-customer-privacy-after-drastic-security-moves-by-supermarkets/news-story/66e0ee85491eacf49fe18e30ee49197e">customer-tracking cameras</a> and other high-tech security measures.</p>
<h2>The Palantir process</h2>
<p>What might this Palantir–Coles collaboration look like in practice? </p>
<p>Typically, Palantir first sends out “forward-deployed engineers” to begin work with an organisation’s data, which is often messy, incomplete and fragmented. These engineers work with different branches and stakeholders to bring the data together into a single compatible whole called “<a href="https://www.palantir.com/explore/platforms/foundry/ontology/">The Ontology</a>”, which contains all the information deemed relevant. </p>
<p>Then the data can be fed into Palantir’s platforms – in this case, customisable software called <a href="https://www.palantir.com/platforms/foundry/">Foundry</a> and the <a href="https://www.palantir.com/platforms/aip/">Artificial Intelligence Platform</a>.</p>
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<p>
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<strong>
Read more:
<a href="https://theconversation.com/how-tech-billionaires-visions-of-human-nature-shape-our-world-144016">How tech billionaires' visions of human nature shape our world</a>
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<p>The platforms let clients explore the data through <a href="https://betterprogramming.pub/palantir-foundry-the-data-operating-system-that-is-not-talked-about-enough-9fb1c98a6b3d">dense but user-friendly interfaces</a> populated by columns and rows, boxes and lines. The Artificial Intelligence Platform also brings ChatGPT-like language models into the mix. </p>
<p>Users might compare earnings between branches, flag a store that seems inefficient, or identify an upcoming period of high spending based on historic patterns. </p>
<p>All of this probably seems banal, or even boring. It’s certainly less overtly problematic than Palantir’s work with governments and law enforcement, which has been slammed for enabling <a href="https://slate.com/technology/2020/09/palantir-ice-deportation-immigrant-surveillance-big-data.html">data-driven deportation</a> or <a href="https://theintercept.com/2021/01/30/lapd-palantir-data-driven-policing/">racist policing</a>, and seen the company described as “<a href="https://slate.com/technology/2020/01/evil-list-tech-companies-dangerous-amazon-facebook-google-palantir.html">evil</a>”. </p>
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<p>
<em>
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Read more:
<a href="https://theconversation.com/high-tech-surveillance-amplifies-police-bias-and-overreach-140225">High-tech surveillance amplifies police bias and overreach</a>
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<p>However, the deal doesn’t need to be overtly malevolent to be meaningful. A technology of surveillance and control is quietly <a href="https://www.routledge.com/Countering-the-Cloud-Thinking-With-and-Against-Data-Infrastructures/Munn/p/book/9781032374154">becoming infrastructure</a>, moving from front-page news to something ticking along silently in the background. In this sense, Palantir shifts from the visible to the operational, imperceptibly but powerfully shaping the lives and livelihoods of Australian supermarket employees and shoppers. </p>
<h2>Optimising the workforce</h2>
<p>We can briefly sketch out three implications of the deal.</p>
<p>First, by inking this deal, Coles frames itself as future-forward and logistically driven. Groceries and grocery-store labour become more data, just like the hedge funds, healthcare, or immigrants that other Palantir clients coordinate. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/coles-and-woolworths-are-moving-to-robot-warehouses-and-on-demand-labour-as-home-deliveries-soar-166556">Coles and Woolworths are moving to robot warehouses and on-demand labour as home deliveries soar</a>
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<p>Supermarkets have been under fire over the past year for <a href="https://www.theguardian.com/business/2023/may/22/australias-big-supermarkets-increased-profit-margins-through-pandemic-and-cost-of-living-crisis-analysis-reveals">increasing profit margins</a> through a pandemic and cost-of-living crisis, and accused of <a href="https://www.theguardian.com/business/2023/jun/05/coles-woolworths-court-accused-of-underpaying-workers">underpaying workers</a>. </p>
<p>The Palantir deal continues this extractive trajectory. Rather than paying workers more or passing savings onto customers, Coles has chosen to invest millions in technology that will “address workforce-related spend” as part of a <a href="https://theshout.com.au/national-liquor-news/coles-ceo-outlines-strategies-for-christmas-and-beyond/">larger effort to cut costs</a> by a billion dollars over the next four years. Food (and the labour needed to grow, pack and ship it) is transformed from a human need to an optimisation problem. </p>
<h2>A walled garden</h2>
<p>Second, dependence. As <a href="https://meson.press/books/ferocious-logics/">my own research found</a>, Palantir clients tend to enjoy the all-encompassing data and new features but also become dependent on them. Data mounts up; new servers are needed; licensing fees are high but must be paid. </p>
<p>Much like Apple or Amazon, Palantir’s services excel at creating “vendor lock-in”, a perfect walled garden which clients find hard to leave. This pattern suggests that, over the next three years, Coles will increasingly depend on Silicon Valley technology to understand and manage its own business. A company that sells a quarter of Australia’s groceries may become operationally reliant on a US tech titan.</p>
<h2>A way of seeing</h2>
<p>Finally, vision. What Palantir sells is fundamentally a way of seeing. Its dashboards promise <a href="https://meson.press/books/ferocious-logics/">a God’s eye view</a> that can stretch across an entire organisation or zoom in to granular detail to locate that “needle in the haystack” insight. </p>
<p>The claim is that this data-driven view is a shortcut to <a href="https://www.tandfonline.com/doi/abs/10.1080/1472586X.2014.887268">total knowledge</a>, a way to map every operation, reveal every important element, and identify every inefficiency. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/574260/original/file-20240208-23-vimnk3.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A complex diagram illustrating the Palantir 'ontology' and how it can be used in an organisation." src="https://images.theconversation.com/files/574260/original/file-20240208-23-vimnk3.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/574260/original/file-20240208-23-vimnk3.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=398&fit=crop&dpr=1 600w, https://images.theconversation.com/files/574260/original/file-20240208-23-vimnk3.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=398&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/574260/original/file-20240208-23-vimnk3.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=398&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/574260/original/file-20240208-23-vimnk3.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=500&fit=crop&dpr=1 754w, https://images.theconversation.com/files/574260/original/file-20240208-23-vimnk3.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=500&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/574260/original/file-20240208-23-vimnk3.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=500&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Palantir promises a ‘total view’ of an organisation that allows full control and optimal decision-making.</span>
<span class="attribution"><a class="source" href="https://blog.palantir.com/connecting-ai-to-decisions-with-the-palantir-ontology-c73f7b0a1a72">Palantir</a></span>
</figcaption>
</figure>
<p>Yet the data inevitably excludes significant social, financial and environmental information. The sweat of workers struggling to pack at pace, the belt-tightening of consumers struggling to make ends meet, and the struggle of farmers to survive unexpected climate impacts will go untracked. </p>
<p>Such details never appear on the platform – and if they’re not data, they don’t matter. Will Palantir’s data-driven myopia translate to how Coles views its workers and customers? </p>
<p>By placing Palantir at the heart of its operations, Coles quietly smuggles in several key assumptions: that food is a commodity to be optimised, that paying for labor is a risk rather than a responsibility, and that data can capture everything of importance. At a time of <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/House/Agriculture/FoodsecurityinAustrali/Report/Chapter_7_-_Food_insecurity">increased food insecurity</a>, Australians should strongly question whether this is the direction one of our major grocery providers should take.</p><img src="https://counter.theconversation.com/content/222883/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Luke Munn does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Coles plans to ‘optimise its workforce’ with big data and AI tools from a controversial tech company.Luke Munn, Research Fellow, Digital Cultures & Societies, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2211192024-01-22T23:42:16Z2024-01-22T23:42:16ZI analysed more than 10,000 Reddit posts on supermarket pricing. 5 key themes emerged<figure><img src="https://images.theconversation.com/files/570284/original/file-20240119-21-mkg6j4.jpg?ixlib=rb-1.1.0&rect=0%2C36%2C4819%2C3166&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/vancouver-canada-jun-19-2023-reddit-2320290375">Koshiro K/Shutterstock</a></span></figcaption></figure><p>A Senate inquiry into supermarket pricing, announced last year, is currently taking public <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Supermarket_Prices/SupermarketPrices#:%7E:text=On%206%20December%202023%2C%20the,report%20by%207%20May%202024.">submissions</a> and will report its findings in <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Supermarket_Prices/SupermarketPrices#:%7E:text=On%206%20December%202023%2C%20the,report%20by%207%20May%202024.">May</a>.</p>
<p>The Albanese government, meanwhile, has <a href="https://www.smh.com.au/politics/federal/supermarkets-have-a-duty-albanese-appoints-craig-emerson-to-check-out-food-prices-20240109-p5ew2z.html">appointed</a> former Labor cabinet minister Craig Emerson to review the <a href="https://www.accc.gov.au/business/industry-codes/food-and-grocery-code-of-conduct">Food and Grocery Code of Conduct</a>.</p>
<p>Coles has <a href="https://www.smh.com.au/politics/federal/supermarket-giants-called-to-face-questions-over-having-too-much-market-power-20231130-p5eo46.html">said</a> it’s “always exploring ways to reduce prices,” while Woolworths <a href="https://www.smh.com.au/politics/federal/supermarket-giants-called-to-face-questions-over-having-too-much-market-power-20231130-p5eo46.html">says</a> it is “working to deliver relief” from high prices. Supply chain costs, inflation, construction costs and energy prices have all contributed to high prices, the major supermarkets say.</p>
<p>But let’s forget the media commentary, the politician sound bytes and the supermarket public messaging for a moment. What are ordinary Australians saying about supermarket pricing? </p>
<p>To find out more, I analysed 10,025 comments made on Reddit using Python programming software. Reddit is a network of online communities where like-minded people can discuss topics of mutual interest. The comments were drawn from the Reddit groups r/australian and r/australia and r/AustralianPolitics. </p>
<p>My research, which is yet to be peer-reviewed, revealed five key themes dominated these discussions.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/570285/original/file-20240119-16-9gmg5h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A Woolworths sign is displayed above a shop entrance." src="https://images.theconversation.com/files/570285/original/file-20240119-16-9gmg5h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/570285/original/file-20240119-16-9gmg5h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=325&fit=crop&dpr=1 600w, https://images.theconversation.com/files/570285/original/file-20240119-16-9gmg5h.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=325&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/570285/original/file-20240119-16-9gmg5h.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=325&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/570285/original/file-20240119-16-9gmg5h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=408&fit=crop&dpr=1 754w, https://images.theconversation.com/files/570285/original/file-20240119-16-9gmg5h.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=408&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/570285/original/file-20240119-16-9gmg5h.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=408&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Woolworths says it is ‘working to deliver relief’ from high prices.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/newcastle-australia-february-2018-front-shop-1086821597">haireena/Shutterstock</a></span>
</figcaption>
</figure>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/amid-allegations-of-price-gouging-its-time-for-big-supermarkets-to-come-clean-on-how-they-price-their-products-219316">Amid allegations of price gouging, it's time for big supermarkets to come clean on how they price their products</a>
</strong>
</em>
</p>
<hr>
<h2>1. ‘ColesWorth’: the two brands knitted together</h2>
<p>These Redditors often used a particular portmanteau in their discussion: “ColesWorth”.</p>
<p>This term, which seems to imply many see no real difference between the two retailers, negatively knits together two brands. It was also interesting to note how often Redditors used the word “they” to refer – fairly indiscriminately – to Coles and Woolworths.</p>
<p>This suggests a real public image problem for Coles and Woolworths, as the actions of one chain come to influence how the other is perceived.</p>
<p>One illustrative Reddit comment said:</p>
<blockquote>
<p>We need to make sure ColesWorth aren’t hurting our citizens.</p>
</blockquote>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/570286/original/file-20240119-27-mrs1qj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A Coles sign is displayed above a shop." src="https://images.theconversation.com/files/570286/original/file-20240119-27-mrs1qj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/570286/original/file-20240119-27-mrs1qj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=329&fit=crop&dpr=1 600w, https://images.theconversation.com/files/570286/original/file-20240119-27-mrs1qj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=329&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/570286/original/file-20240119-27-mrs1qj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=329&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/570286/original/file-20240119-27-mrs1qj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=413&fit=crop&dpr=1 754w, https://images.theconversation.com/files/570286/original/file-20240119-27-mrs1qj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=413&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/570286/original/file-20240119-27-mrs1qj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=413&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The actions of one chain can easily influence how the other is perceived.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/sydney-australia-aug-2019-shop-front-1504420667">haireena/Shutterstock</a></span>
</figcaption>
</figure>
<h2>2. ‘Duopoly’ concerns</h2>
<p>Many Redditors expressed concern about what they saw as a duopoly, a term that showed up frequently.</p>
<p>One commenter, for instance, said:</p>
<blockquote>
<p>Who could’ve guessed in Australia we’ve allowed our newspapers to be run by a monopoly, our banks by a Big Four effectively acting like a monopoly, and our supermarkets becoming a duopoly.</p>
</blockquote>
<p>On the Senate inquiry, another said:</p>
<blockquote>
<p>This is good news. This brand duo will certainly feel the heat of more scrutiny, possibly curbing their monopoly in the short term.</p>
</blockquote>
<p>A different Redditor opined:</p>
<blockquote>
<p>Coles and Woolworths’ duopoly should split up, but I doubt that Labor would have the guts, and the LNP (Liberal National Party) wouldn’t do it, so things will return to normal soon enough.</p>
</blockquote>
<h2>3. Perturbed by profits</h2>
<p>Coles and Woolworths made net profits in 2022-23 of <a href="https://www.theguardian.com/business/2023/aug/23/woolworths-posts-162bn-profit-with-dramatic-lift-in-margins-despite-cost-of-living-crisis">A$1.1 billion and A$1.62 billion</a>, respectively. </p>
<p>Many Redditors expressed concern about supermarket profits. One commenter wrote: </p>
<blockquote>
<p>They can charge higher and higher prices for basic necessities, and there’s nothing we can do about it except pay up or starve.</p>
</blockquote>
<p>Another said:</p>
<blockquote>
<p>Big business changes when its customers revolt; in a profit-focused world it’s boycott or accept.</p>
</blockquote>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/570288/original/file-20240119-15-4b4ufn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A screenshot shows Reddit." src="https://images.theconversation.com/files/570288/original/file-20240119-15-4b4ufn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/570288/original/file-20240119-15-4b4ufn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/570288/original/file-20240119-15-4b4ufn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/570288/original/file-20240119-15-4b4ufn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/570288/original/file-20240119-15-4b4ufn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/570288/original/file-20240119-15-4b4ufn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/570288/original/file-20240119-15-4b4ufn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Reddit is a network of online communities where like-minded people can discuss topics of mutual interest.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/london-uk-april-20th-2017-homepage-625284344">chrisdorney/Shutterstock</a></span>
</figcaption>
</figure>
<h2>4. The Aldi alternative</h2>
<p>Supermarket chain Aldi, which markets itself as a cheaper alternative to Coles and Woolworths, was frequently mentioned by these Redditors.</p>
<p>One said:</p>
<blockquote>
<p>Coles and Woolworths keep hiking prices for years, but thankfully we have at least Aldi to keep them in check.</p>
</blockquote>
<p>A different Redditor said:</p>
<blockquote>
<p>Woolies prices floored me […] for everyday food items. Ended up going to Aldi instead.</p>
</blockquote>
<p>Another wrote:</p>
<blockquote>
<p>We have greengrocers, butchers and fishmongers for fresh stuff. Aldi or IGA for tinned and dry goods. The best part is if you do this, the price drops for you straight away, and, in theory, for everyone else in time.</p>
</blockquote>
<p>This suggests the stiff competition Woolworths and Coles already face from Aldi (and other alternatives) is not going away any time soon.</p>
<h2>5. Calls for government action</h2>
<p>Many commenters sought government intervention, while others were sceptical it would ever happen or would help.</p>
<p>Some linked the Senate inquiry to similar past investigations in banking, aged care and health, dismissing them as “a waste of taxpayers’ money” that would bring no tangible outcomes.</p>
<p>One commenter wrote: </p>
<blockquote>
<p>Corporations wield more influence than voters over the major parties, and so will continue to get their way as long as this remains.</p>
</blockquote>
<p>Some called for “full federalisation” of supermarkets, the breakup of “monopolies” and even for the arrest of high-level management at Coles and Woolworths.</p>
<p>Many of these proposals seem unlikely but such comments show the depth of consumer anger about supermarket pricing.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/570289/original/file-20240119-25-ptsagy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Australian prime minister Anthony Albanese addresses media at a press conference." src="https://images.theconversation.com/files/570289/original/file-20240119-25-ptsagy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/570289/original/file-20240119-25-ptsagy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/570289/original/file-20240119-25-ptsagy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/570289/original/file-20240119-25-ptsagy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/570289/original/file-20240119-25-ptsagy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/570289/original/file-20240119-25-ptsagy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/570289/original/file-20240119-25-ptsagy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Many commenters have called for government intervention on the issue of pricing.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/canberra-australia-sep-22-2022-prime-2218769447">Wirestock Creators/Shutterstock</a></span>
</figcaption>
</figure>
<h2>Why do online conversations about brands matter?</h2>
<p>Clearly, social media doesn’t include everyone in Australia and while the Reddit community is large it isn’t a representative sample of broader Australian society. An element of selection bias is at play.</p>
<p>However, the anger on display in these forums does indicate Coles and Woolworths face difficult brand risks. The advent of the “ColesWorth” phenomenon must be particularly worrying for the two brands, which may now struggle not to be tarred with the same brush even if they make radical changes to differentiate themselves from their competitors.</p>
<p>The comments I analysed show the supermarket pricing story is not just a media beat-up. People are talking about the issue, suggesting a shift to supporting local or cheaper businesses and calling for government action on pricing.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/as-australian-supermarkets-are-blamed-over-food-costs-french-grocer-carrefour-targets-pepsi-for-unacceptable-price-rises-220646">As Australian supermarkets are blamed over food costs, French grocer Carrefour targets Pepsi for 'unacceptable' price rises</a>
</strong>
</em>
</p>
<hr>
<img src="https://counter.theconversation.com/content/221119/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Kanika Meshram does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Supermarket pricing is a big story but let’s forget the media coverage, the politician sound bytes and the corporate PR for a moment. What are ordinary Australians saying about supermarket pricing?Kanika Meshram, Lecturer in Marketing, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2206462024-01-10T00:46:26Z2024-01-10T00:46:26ZAs Australian supermarkets are blamed over food costs, French grocer Carrefour targets Pepsi for ‘unacceptable’ price rises<figure><img src="https://images.theconversation.com/files/568517/original/file-20240109-22-jcbhlh.jpg?ixlib=rb-1.1.0&rect=89%2C116%2C4495%2C3327&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/bucharest-romania-0501-shopping-carts-belonging-1983538025">Cristi Croitoru/Shutterstock</a></span></figcaption></figure><p>French supermarket Carrefour has fired a warning shot in a price war with global food brands, dropping PepsiCo products last week because of “<a href="https://www.washingtonpost.com/business/2024/01/04/pepsi-lays-carrefour-grocery/">unacceptably high</a>” increases. </p>
<p>This has seen Pepsi soft drinks removed from stores across Europe, as have Doritos, Quaker breakfast cereals and other food produced by the multinational.</p>
<p>It is usually the job of shoppers and consumer advocates to call out corporations for overstepping the mark on pricing, often targeting retailers. But this time, in a pre-emptive strike against the source of the increases, Carrefour pushed back, showing they were not the problem.</p>
<p>This is a radical departure from the usual policy of retailers passing on costs directly to consumers.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1743082147081040226"}"></div></p>
<p>Refusing to carry producers’ brands – known as delisting products – can be risky for retailers, prompting customers to move to competitors who stock their favourite goods.</p>
<p>In Australia, <a href="https://www.huntexportadvice.com/post/australia-market-overview-2021#:%7E:text=Market%20Share,-The%204%20main&text=The%20Woolworths%20Group%20is%20the,10%25%20and%20Metcash%207%25.">65% of the grocery retail sector</a> is controlled by Woolworths (37%) and Coles (28%), raising concerns about market dominance and a lack of real competition.</p>
<p>Strict rules set by the <a href="https://www.accc.gov.au/business/industry-codes/food-and-grocery-code-of-conduct/obligations-and-protections-under-the-food-and-grocery-code#toc-delisting-products">Australian Competition & Consumer Commission</a> (ACCC) govern the requirements for delisting to ensure there is no abuse of market power. </p>
<h2>Market share vs brand value</h2>
<p>In <a href="https://cmaconsulting.com.au/power-in-negotiation-taking-control-of-how-the-cookie-crumbles/">2015</a> biscuit and snack food producer Arnott’s raised prices on 54 products by 10% and Coles refused to carry them.</p>
<p>This decision to stand up to the multinational (contradicting the stereotype it took advantage of its market dominance) was welcomed by many consumers.</p>
<p>However, some were not willing to go without their Tim Tams and Coles ultimately agreed to let Arnott’s raise the prices of 44 products.</p>
<p>Woolworths had a similar issue with Arnott’s in <a href="https://www.afr.com/companies/retail/arnott-s-in-stand-off-with-woolies-20190926-p52v61">2019</a> over prices and promotions, refusing to pass through an increase due to drought and currency fluctuations.</p>
<p>The opposite, however, happened earlier in the same year, when <a href="https://www.heraldsun.com.au/news/victoria/supply-issue-blocking-uncle-tobys-products-getting-to-woolworths/news-story/596260691208f93d2724726a05dc0c5e">Uncle Toby’s </a>withheld inventory from Woolworths because they did not agree to pass on price hikes.</p>
<h2>Runaway prices</h2>
<p>Carrefour’s dispute with PepsiCo should be viewed in the context of the cost of food in Europe blowing out over the past two years, with <a href="https://think.ing.com/articles/food-inflation-is-cooling-down-after-a-hot-summer/#:%7E:text=A%20typical%20EU%20consumer%20currently,by%20'only'%2019%25.">average prices up 30% since 2021</a>.</p>
<p>These increases have prompted retailers to be more transparent with consumers about how their profits compare to those of producers. </p>
<p>Revealing the cause of the price increases, and refusing to pass them on, distances the retailers’ business model from the producers’ opportunistic attempts to increase profits.</p>
<h2>Price gouging or legitimate cost increases?</h2>
<p>This week, Treasurer <a href="https://www.smh.com.au/politics/federal/cost-of-living-relief-on-chalmers-to-do-list-20240108-p5evun.html">Jim Chalmers</a> echoed calls from the Coalition to investigate supermarket pricing and review the ACCC’s grocery <a href="https://www.accc.gov.au/business/industry-codes/food-and-grocery-code-of-conduct">code</a> to ensure savings are passed on as costs abate.</p>
<p><a href="https://www.afr.com/policy/economy/chalmers-threatens-to-punish-supermarket-price-gouging-20240108-p5evuh">Data from the ABS</a> shows wholesale food costs only rose 0.7% in the most recent quarter, while the price for a typical basket of consumer food items rose 3.2%.</p>
<p>This gap also appears in Europe, where the percentage of “unexplained” rises in food prices increased from <a href="https://www.allianz.com/en/press/news/studies/230503_Allianz-High-food-prices-Great-interest-in-Allianz-research-study.html">3% to 10% from 2022 to 2023</a>.</p>
<p>Bigger production costs did not account for all of the increases, leading to the conclusion producers were taking advantage of consumers, blaming the war in Ukraine, increased transport costs and global supply chain disruption to rationalise higher prices on the shelf. </p>
<p>In a 2023 report into European food inflation, Allianz said this was “<a href="https://www.allianz.com/content/dam/onemarketing/azcom/Allianz_com/economic-research/publications/specials/en/2023/april/food-inflation/2023_04_14_europe_food_inflation.pdf">catch-up profit-taking</a>” to recover losses from previous years. </p>
<h2>The rise of shrinkflation</h2>
<p>So-called “shrinkflation” – where the price of goods doesn’t change but they are sold in smaller quantities for the same price – has also made consumers groups sceptical.</p>
<p>In Australia, it is factored into the calculation of inflation for household goods and services as measured by the Consumer Price Index. The ABS characterises shrinkflation as a “<a href="https://www.abs.gov.au/articles/quality-change-australian-cpi">quality decrease</a>”.</p>
<p>Consumer advocacy group CHOICE has noted shrinkflation in Australia since 2016 in its <a href="https://choice.community/t/the-groceries-shrinking-and-getting-more-expensive/27465/14">Community Forum</a>, citing size reductions in products ranging from chocolate bars to breakfast cereals.</p>
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Read more:
<a href="https://theconversation.com/amid-allegations-of-price-gouging-its-time-for-big-supermarkets-to-come-clean-on-how-they-price-their-products-219316">Amid allegations of price gouging, it's time for big supermarkets to come clean on how they price their products</a>
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<p>In Europe, Carrefour instituted a bold in-store campaign last year of naming and shaming brands that downsized products using <a href="https://www.bbc.com/news/business-66809188">signage that highlights the shrinkage.</a> </p>
<p>This allows consumers to make informed decisions without limiting their buying options. But it also risks backlash from producers over how their goods are displayed on the shelf.</p>
<p>Without regulation, or a similar campaign from retailers, Australian consumers must check unit prices to ensure they are not paying more for less.</p>
<h2>A chance to generate goodwill</h2>
<p>Carrefour’s stand against a global brand and decision to delist their products recognises consumers everywhere are feeling the impact of higher prices.</p>
<p>At a time when the <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Supermarket_Prices/SupermarketPrices">Senate</a> is investigating claims of price gouging by Australia’s largest supermarket chains, more transparency would be a welcome change.</p>
<p>From negotiations at the farm gate to the multinational boardroom, there is an opportunity for the big grocery retailers to pass on savings where possible, and increase brand loyalty.</p>
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Read more:
<a href="https://theconversation.com/the-cost-of-living-is-biting-heres-how-to-spend-less-on-meat-and-dairy-206703">The cost of living is biting. Here’s how to spend less on meat and dairy</a>
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<img src="https://counter.theconversation.com/content/220646/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Garritt C. Van Dyk does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Pressure for greater transparency by food producers and retailers about costs is increasing as rising grocery prices hit the hip pocket.Garritt C. Van Dyk, Lecturer, University of NewcastleLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2193162023-12-19T00:02:42Z2023-12-19T00:02:42ZAmid allegations of price gouging, it’s time for big supermarkets to come clean on how they price their products<figure><img src="https://images.theconversation.com/files/565402/original/file-20231213-23-483trl.jpg?ixlib=rb-1.1.0&rect=0%2C14%2C4992%2C3308&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/minded-man-viewing-receipts-supermarket-tracking-1980000383">Denys Kurbatov/Shutterstock</a></span></figcaption></figure><p>With inflation driving up the cost of living, many are dreading not just the hassle of a big grocery shop, but also the bruising cost.</p>
<p>But while Australians struggle with their budget and spending, several major supermarkets made large profits in 2022–23. Coles and Woolworths, for example, made net profits of <a href="https://www.theguardian.com/business/2023/aug/23/woolworths-posts-162bn-profit-with-dramatic-lift-in-margins-despite-cost-of-living-crisis">A$1.1 billion and A$1.62 billion</a>, respectively. </p>
<p><a href="https://www.news.com.au/finance/money/costs/coles-and-woolworths-chief-executives-to-face-senate-inquiry-into-supermarket-price-hikes/news-story/0f74b6d4cac20ee65b818642f4f554ba">Allegations of price gouging</a> by Australian supermarkets have even led to a <a href="https://www.abc.net.au/news/2023-12-03/greens-move-to-establish-senate-inquiry-into-supermarkets/103179656">Senate inquiry</a> into supermarket pricing.</p>
<p>Coles chief executive Leah Weckert has <a href="https://www.colesgroup.com.au/media-releases/?page=coles-group-statement-on-senate-inquiry-into-supermarket-prices">promised</a> to appear at the inquiry, saying the company “works hard to keep prices affordable for Australian households […]” and is ready to “engage in an informed discussion on the factors that influence supermarket pricing.”</p>
<p>Woolworths Group chief executive Brad Banducci, meanwhile, <a href="https://www.woolworthsgroup.com.au/au/en/media/latest-news/2023/woolworths-group-confirms-ceo-will-appear-at-senate-inquiry-on-s.html">said</a> he welcomes the chance to explain to the Senate “how we are working to balance the needs of our customers, our team and our suppliers in the context of economy-wide inflationary pressure”.</p>
<p>But why wait until a Senate inquiry to explain all that? There’s an opportunity <em>now</em> for the big supermarkets to be more transparent about how they decide what prices to put on products.</p>
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Read more:
<a href="https://theconversation.com/feeling-lonely-too-many-of-us-are-heres-what-our-supermarkets-can-do-to-help-211126">Feeling lonely? Too many of us are. Here's what our supermarkets can do to help</a>
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<h2>Allegations of price gouging</h2>
<p>It’s not just <a href="https://www.abc.net.au/news/2023-12-03/greens-move-to-establish-senate-inquiry-into-supermarkets/103179656">politicians</a> and <a href="https://au.finance.yahoo.com/news/woolworths-photo-exposes-everything-wrong-with-supermarkets-002726485.html">customers</a> complaining about supermarket prices.</p>
<p>Australian farmers have also accused Coles and Woolworths of price gouging for <a href="https://www.news.com.au/finance/business/retail/aussie-farmer-shipping-beautiful-melons-to-japan-rather-than-deal-with-coles-and-woolworths/news-story/bd685cd91f934f31c02c764097f496ae">fruits and vegetables</a>, claiming supermarkets profit too much from their crops. </p>
<p>The National Farmers’ Federation has <a href="https://www.freshplaza.com/oceania/article/9583132/farmers-call-for-price-transparency-beyond-supermarket-inquiry/">called</a> for greater transparency from the supermarkets on how they decide prices. </p>
<p>A recent <a href="https://www.freshplaza.com/oceania/article/9583132/farmers-call-for-price-transparency-beyond-supermarket-inquiry/">survey</a> by AUSVEG (the peak industry body for the Australian vegetable and potato industries) found 34% of vegetable growers are considering leaving the industry in the next 12 months as they <a href="https://www.news.com.au/finance/business/retail/aussie-farmer-shipping-beautiful-melons-to-japan-rather-than-deal-with-coles-and-woolworths/news-story/bd685cd91f934f31c02c764097f496ae">struggle</a> to turn a profit.</p>
<p>When asked about calls for more transparent pricing, a Woolworths spokesperson told The Conversation:</p>
<blockquote>
<p>We publish both our average gross margin and EBIT (earnings before interest and taxes) margin transparently in our public financial reports.</p>
<p>Supply chain costs are different for every product and they are constantly fluctuating, as are our buying costs in the case of fresh food like fruit and vegetables.</p>
<p>Shoppers are very savvy. We operate in a highly competitive industry and we know our customers will – and do – shop around to find the best value.</p>
<p>As we start to see the rate of inflation ease, we will continue to focus on delivering savings to our customers.</p>
</blockquote>
<p>Coles was also contacted for comment but did not reply before publication deadline.</p>
<h2>Factoring in many costs</h2>
<p>When a retailer buys products from their suppliers, it involves a supply chain that includes supply, manufacturing, transportation and distribution, warehouse and storage. </p>
<p>There are several costs – such as product costs, transportation fees, labour, rent, inventory and more – involved at every step of the process. </p>
<p>The supermarket must factor in all costs, as well as its profit margin, when it sets the selling price for a product.</p>
<p>Organisations usually have these cost breakdowns as part of their internal decision-making – but they don’t typically disclose these calculations to their customers.</p>
<h2>Not disclosing the cost breakdowns</h2>
<p>The problem for supermarkets is that when they don’t disclose details such as their buying price or supply chain costs, it can contribute to anger among customers and suppliers.</p>
<p>Apple and Pear Australia Limited – the national peak industry body for apple and pear growers – has <a href="https://apal.org.au/retailers-need-to-demonstrate-greater-price-transparency/">called for</a> retailers to demonstrate greater price transparency, saying, “frustration at the behaviour of the major retailers has again angered many growers”.</p>
<p>Of course, supermarkets use several pricing strategies to win customer support – such as locking in prices for a certain period of time, everyday low prices on key products, specials, price-matching and discounts. </p>
<p>Supermarkets spend millions of dollars on these price-related advertisements, but perhaps they would get more community support by simply disclosing cost breakdowns on their websites and in-store to show their commitment to transparent and fair pricing. </p>
<h2>Transparent and fair pricing</h2>
<p>Research shows price transparency helps businesses build trust with their <a href="https://fastercapital.com/content/The-Importance-of-Price-Transparency-in-Pricing-Psychology.html">customers</a>.</p>
<p>Many major retailers already have this information for internal decision-making, so could display this online and in stores. </p>
<p>Yes, prices change constantly due to factors outside their control – such as fuel prices, shipping problems or even supply chain issues linked to global conflict. But being more open with customers about these issues could help repair relationships and their public image.</p>
<p>Perhaps there may even be a role for government, which could collaborate with supermarkets and retailers to develop policies for transparent and fair pricing. </p>
<p>Everyday Australians deserve to be treated fairly and given the information they need about how major supermarkets price their products, so they can make informed decisions at the checkout.</p>
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Read more:
<a href="https://theconversation.com/a-weird-dinging-sound-that-everyone-dreads-what-rapid-deliveries-mean-for-supermarket-workers-185960">'A weird dinging sound that everyone dreads': what rapid deliveries mean for supermarket workers</a>
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<img src="https://counter.theconversation.com/content/219316/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sanjoy Paul does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Why wait until a Senate inquiry to explain how supermarkets come up with the prices in their stores? There’s an opportunity now for the big supermarkets to be more transparent on pricing.Sanjoy Paul, Associate Professor, UTS Business School, University of Technology SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2043532023-04-26T05:28:44Z2023-04-26T05:28:44ZColes’ Uber Eats deal brings the gig economy inside the traditional workplace<figure><img src="https://images.theconversation.com/files/522923/original/file-20230426-14-jw8pwz.jpeg?ixlib=rb-1.1.0&rect=22%2C25%2C2149%2C1528&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">KYDPL KYODO / AP</span></span></figcaption></figure><p>This month <a href="https://www.afr.com/companies/retail/coles-uber-eats-to-offer-one-hour-grocery-delivery-20230413-p5d0b1">Coles announced a major new partnership with Uber Eats</a> that will further expand the supermarket giant’s links with the gig economy. Under the arrangement, Uber Eats drivers will not only complete home delivery for the supermarket, drivers will also pick and pack orders from supermarket shelves. </p>
<p>Previously, online orders were completed by Coles’ directly employed “personal shoppers” who would hand over the order to a delivery partner. More than 500 Coles stores across the country will start selling goods via the digital platform, with gig workers performing the role of a Coles personal shopper. </p>
<p>The deal differs from an <a href="https://www.smh.com.au/business/companies/woolworths-offers-rapid-deliveries-for-5-via-new-metro60-app-20220623-p5aw7p.html">existing partnership between Woolworths Metro60 and Uber Eats</a>, forged in June 2022, which also promises rapid delivery, albeit with orders fulfilled by supermarket workers. </p>
<p>The Coles partnership is a significant development that will see Uber Eats drivers working inside the supermarket alongside traditional employees and customers.</p>
<h2>The gig economy enters the supermarket</h2>
<p>The supermarket duopoly have been steadily recruiting gig workers into their home delivery offerings since Coles <a href="https://www.cmo.com.au/article/631121/airtasker-partners-coles-personalised-grocery-service/">set up a partnership with Airtasker</a> in 2017. Demand for rapid deliveries then surged during the pandemic years of 2020 and 2021. </p>
<p>From one perspective, Coles and Woolworths are simply outsourcing specific tasks (such as picking, packing and delivery) to Uber Eats and other gig-work platforms. From another, the supermarkets are <em>absorbing</em> gig workers into their own activities. </p>
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Read more:
<a href="https://theconversation.com/coles-and-woolworths-are-moving-to-robot-warehouses-and-on-demand-labour-as-home-deliveries-soar-166556">Coles and Woolworths are moving to robot warehouses and on-demand labour as home deliveries soar</a>
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<p>Gig workers are not formal employees and do not enjoy the same legal protections as other staff, but they are nonetheless performing work that is core supermarket business. </p>
<p>The so-called “<a href="https://www.scmr.com/article/re_inventing_the_last_mile">last mile</a>” of delivery – the final leg between a hub such as a warehouse or supermarket and the consumer – is widely considered the most difficult and unprofitable part of logistics, particularly for rapid deliveries. While both supermarkets run their own last-mile systems for deliveries booked in advance, the partnerships with Uber Eats let them offer customers rapid home delivery options while offloading the risk associated with the last mile.</p>
<h2>Potentially tens of thousands of jobs at stake</h2>
<p>In 2022, I interviewed supermarket workers about <a href="https://theconversation.com/a-weird-dinging-sound-that-everyone-dreads-what-rapid-deliveries-mean-for-supermarket-workers-185960">the impact of rapid delivery services</a>. Many expressed concerns that the gig economy was “getting closer” with some predicting the role of the personal shopper – a supermarket employee who would gather and pack items for delivery – would eventually be taken up by gig workers. </p>
<p>Coles says the Uber Eats drivers will “<a href="https://www.smh.com.au/technology/coles-to-put-500-plus-stores-on-uber-eats-in-major-gig-economy-expansion-20230413-p5d048.html">complement rather than compete</a>” with existing direct-employed supermarket employees. </p>
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Read more:
<a href="https://theconversation.com/a-weird-dinging-sound-that-everyone-dreads-what-rapid-deliveries-mean-for-supermarket-workers-185960">'A weird dinging sound that everyone dreads': what rapid deliveries mean for supermarket workers</a>
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<p>For now, gig workers and employees will work alongside each other. Over time, however, it is possible other supermarket roles will be displaced into the gig economy. </p>
<p>Coles and Woolworths are Australia’s largest private sector employers. As they bring the gig economy into their workplaces, it has the potential to affect tens of thousands of jobs. </p>
<h2>Grocery is a winner-takes-all industry</h2>
<p>The new partnership was announced just days after grocery delivery startup Milkrun officially folded. </p>
<p>Milkrun was the last standing of four Australian rapid grocery delivery startups launched in the past couple of years. The company failed to turn a profit, was quick to abandon its central proposition of ten-minute delivery, and <a href="https://www.startupdaily.net/topic/business/holy-cow-grocery-delivery-startup-milkrun-is-dead-86-million-later-aged-19-months/">burned through $86 million in venture capital</a> in less than two years. </p>
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Read more:
<a href="https://theconversation.com/milkruns-demise-is-another-nail-in-the-10-minute-grocery-delivery-business-model-203757">MilkRun's demise is another nail in the 10-minute grocery-delivery business model</a>
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<p>With much less fanfare, both Coles and Woolworths have achieved what startups couldn’t. Their advantage has been their enormous scale and market power, enabling them to push suppliers for lower prices and make use of their existing networks of distribution centres, stores, delivery vans – and now partnerships with the gig economy.</p>
<p>In an unfair playing field, the supermarket giants have the best of both worlds: vertical integration with the supply chain <em>and</em> the ability to shift risk away from the business and onto individual gig workers. </p>
<h2>Essential service or frivolous convenience?</h2>
<p>The example of Milkrun and other startups suggests the business of on-demand grocery delivery may not be feasible without an army of precariously employed workers such as Uber Eats drivers. This raises another question: do we really need or want groceries delivered this quickly?</p>
<p>The supermarkets often frame their new deliveries services as benefiting “<a href="https://www.woolworths.com.au/shop/discover/community/news/woolworths-launches-new-initiative-to-increase-grocery-home-deliveries-to-vulnerable-australians">vulnerable Australians</a>”, such as the elderly and people living with disabilities. The implication is that the availability of rapid grocery delivery is a social good, rather than simply a convenience.</p>
<p>However, if the service is truly essential, it seems the people doing the work should be valued and supported with well-paid and secure employment. What’s more, it’s not entirely convincing that rapid grocery delivery in its current form is essential at all. </p>
<p>Many personal shoppers I interviewed said on-demand purchases tended to be frivolous. Referring to the partnership between Woolworths and Uber Eats, one worker recalled: </p>
<blockquote>
<p>People are ordering […] a single banana and a Red Bull. It’s really weird the stuff you get.</p>
</blockquote>
<p>Another added: </p>
<blockquote>
<p>No one used to do it. Now, people buy only five things and they’ll pay that fee to have it delivered soon. It’s more popular for alcohol or cigarettes or something like that.</p>
</blockquote>
<p>One supermarket worker expressed deep scepticism of rapid delivery, stating:</p>
<blockquote>
<p>It didn’t seem like it was about meeting the demands of shoppers, that’s made explicit through the article cap for Uber Eats. […] You can only order 25 [items] so it wasn’t about regular shopping. Really, I think it was just more for the convenience. Instead of going to the shops yourself, you can just wait at home for it, and someone else can pick it for you. </p>
</blockquote>
<p>The cost of this convenience will be carried by supermarket workers, who in recent years have already seen their work transformed to adhere to the logic of the gig economy, with on-demand time pressures and ad-hoc scheduling. Now, as the gig economy moves into the physical supermarket space, the distinction between conventional employment and gig work is further blurred.</p><img src="https://counter.theconversation.com/content/204353/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Lauren Kate Kelly receives funding from the Australian Research Council (ARC) and the ARC Centre of Excellence for Automated Decision-Making and Society. She works with United Workers Union which has members across the supermarket supply chain. </span></em></p>Australia’s largest private-sector employers are steadily integrating gig workers into their operations.Lauren Kate Kelly, PhD Candidate, ARC Centre of Excellence for Automated Decision-Making and Society, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1952842022-11-24T19:06:16Z2022-11-24T19:06:16ZGroceries delivered in 60 minutes: it’s on the cards but just not yet<p>From the food replicator in Star Trek to Dumbledore summoning food in Hogwarts’ banquet hall, we love the idea of instant food on demand.</p>
<p>This week, Australian supermarket giant Coles appealed to that love by announcing
a pick-and-collect service that takes <a href="https://www.afr.com/companies/retail/coles-aims-to-deliver-groceries-in-less-than-60-minutes-20221122-p5c0fe">less than 60 minutes</a>, shaving 30 minutes off its existing promise.</p>
<p>You’ll be able to order up to 40 items from a list of more than 20,000 products online, then drive to one of 400 Coles supermarkets offering the “Rapid Click & Collect” scheme to collect your groceries within the hour.</p>
<p>Some news reports have given the impression this is a home delivery service. It’s not. Coles will not deliver groceries to your door in such a short time. </p>
<p>But could such a service be on the cards? </p>
<p>It’s possible. But the “last kilometre” of the grocery supply chain – from the store to your home – remains the most complicated in terms of logistics, as well as environmental and social costs.</p>
<h2>Customers want convenience and speed</h2>
<p>Rapid delivery services particularly for food have boomed during the pandemic. It’s a trend that will continue as consumers demand more <a href="https://www.retailcustomerexperience.com/news/speed-convenience-are-tops-for-retail-consumers-reveals-new-research/">convenience and speed</a>.</p>
<p>With life busier than ever, people want everything from laundry soap to roast chicken delivered. They don’t want to spend time going around shelves looking for products or queuing at the checkout. </p>
<p>In business speak, these new services are part of what is called an <a href="https://hbr.org/2017/01/a-study-of-46000-shoppers-shows-that-omnichannel-retailing-works">omnichannel</a> – combining “clicks and bricks” to give customers the choice about what, when and where to buy.</p>
<p>In a not-so-distant past, the only way to get to your groceries was to go to the supermarket. Now you can install an app, access the website, click on your smartwatch or let your <a href="https://www.theverge.com/2020/1/2/21046822/samsung-lg-smart-fridge-family-hub-instaview-thinq-ai-ces-2020">hi-tech fridge</a> place orders automatically.</p>
<h2>Last-kilometre delivery is complicated</h2>
<p>For shoppers, at least, fast delivery services simplify things.</p>
<p>You can use an app to store preferred orders, making your purchase with a few clicks. You have more choice because you are not limited to what you see on the shelves. You can compare prices between providers easily. </p>
<p>But the “last kilometre delivery” – from a store or warehouse to your doorstep – is the most complicated and <a href="https://www.forbes.com/sites/stevebanker/2020/08/26/last-mile-deliveries-complex-costly-and-critical/?sh=11ccbc7b723c">most expensive</a> part of the journey for any product. </p>
<figure class="align-center ">
<img alt="The leg from the supermarket to your home is the costliest part of the supply chain." src="https://images.theconversation.com/files/497159/original/file-20221124-18-7fjbx8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/497159/original/file-20221124-18-7fjbx8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=449&fit=crop&dpr=1 600w, https://images.theconversation.com/files/497159/original/file-20221124-18-7fjbx8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=449&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/497159/original/file-20221124-18-7fjbx8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=449&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/497159/original/file-20221124-18-7fjbx8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=564&fit=crop&dpr=1 754w, https://images.theconversation.com/files/497159/original/file-20221124-18-7fjbx8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=564&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/497159/original/file-20221124-18-7fjbx8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=564&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The leg from the supermarket to your home is the costliest part of the supply chain.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<p>The <a href="https://www.insiderintelligence.com/insights/last-mile-delivery-shipping-explained/">cost to deliver</a> your preferred Italian-made pasta sauce from the local supermarket to your doorstep, for example, is similar to the cost of shipping the same bottle from a port in Milan to a port in Sydney.</p>
<p>Delivery times are subject to driver availability and traffic. You may not be there to receive the order. Returning a product <a href="https://www.choice.com.au/shopping/everyday-shopping/supermarkets/articles/out-of-date-food-in-online-grocery-orders">can be a hassle</a>.</p>
<p>The need for speed also creates <a href="https://www.theguardian.com/technology/2020/feb/05/amazon-workers-protest-unsafe-grueling-conditions-warehouse">gruelling conditions</a> for the workers who do the picking and packing. It puts extra pressure on those doing the delivery – particularly when done by a “partner” platform using gig workers. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/a-weird-dinging-sound-that-everyone-dreads-what-rapid-deliveries-mean-for-supermarket-workers-185960">'A weird dinging sound that everyone dreads': what rapid deliveries mean for supermarket workers</a>
</strong>
</em>
</p>
<hr>
<p>With more delivery trucks making more trips, there is an <a href="https://www.tandfonline.com/doi/full/10.1080/13504509.2015.1124471?journalCode=tsdw20">additional burden</a> on roads with increased travel times, delays, reduced average speed and more carbon emissions. Extra <a href="https://whiplash.com/blog/reduce-packaging-waste-ecommerce/">packaging is needed</a> and recycling is not guaranteed – contributing to landfill problems.</p>
<h2>What about the future?</h2>
<p>Pick-and-collect services that leave the “last kilometre” to you allow businesses to avoid the complexity, costs and risks associated with rapid home delivery services. </p>
<p>It’s a wise choice for Coles. As an emerging sector, competition is fierce and margins are slim for fast delivery services. Even during COVID, when food delivery peaked, companies such as Deliveroo <a href="https://www.businessleader.co.uk/deliveroo-sees-revenue-surge-but-doesnt-make-profit/">could not make a profit</a>. The Albanese government’s promise to improve conditions for gig workers will inevitably impact costs while resetting the rules. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/deliveroos-exit-from-australia-shows-why-gig-workers-need-more-protection-194743">Deliveroo's exit from Australia shows why gig workers need more protection</a>
</strong>
</em>
</p>
<hr>
<p>But what happens in the future is anyone’s guess. Where there is demand, a will to provide emerges. <a href="https://www.cnbc.com/2022/05/24/walmart-expands-drone-delivery-service-to-reach-4-million-households.html">Drones</a> may come massively into play. Train stations and community centres may become convenient places to pick up parcels and groceries. Since 2015, Amazon has <a href="https://www.usatoday.com/story/tech/news/2018/04/24/amazon-starts-delivering-your-car-wherever-its-parked/499900002/">delivered to your car trunk</a> wherever you are parked in the United States.</p>
<p>Anything short of food magically appearing on your table is on the cards. The one thing that will not change is that consumers will continue to look for convenience and speed.</p><img src="https://counter.theconversation.com/content/195284/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Flavio Macau receives funding from the Planning and Transport Research Centre (PATREC). He is affiliated with the Australasian Supply Chain Institute (ASCI).</span></em></p>The ‘last kilometre’ between the supermarket and your home remains the most costly and complicated leg of the grocery supply chain.Flavio Macau, Associate Dean - School of Business and Law, Edith Cowan UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1859602022-07-18T04:07:35Z2022-07-18T04:07:35Z‘A weird dinging sound that everyone dreads’: what rapid deliveries mean for supermarket workers<figure><img src="https://images.theconversation.com/files/474476/original/file-20220718-12-iehrty.jpg?ixlib=rb-1.1.0&rect=500%2C0%2C1133%2C895&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Woolworths</span></span></figcaption></figure><p>Online grocery shopping has boomed since the pandemic began in 2020, with Woolworths and Coles steadily expanding their home-delivery offerings. Rapid delivery is the latest frontier.</p>
<p>Woolworths and Coles Express have been offering on-demand deliveries through UberEats and Doordash since last year. Woolworths recently launched the <a href="https://www.smh.com.au/business/companies/woolworths-offers-rapid-deliveries-for-5-via-new-metro60-app-20220623-p5aw7p.html">Metro60 app</a> which promises home delivery within an hour to select suburbs.</p>
<p>These arrangements have received little fanfare, yet they signal a significant shift for supermarket workers. </p>
<p>As part of ongoing research, I study how the gig economy is transforming conditions of work within traditional employment. To find out how interacting with delivery platforms affects supermarket employees, I interviewed 16 experienced “personal shoppers” at Woolworths and Coles who fill delivery orders from supermarket shelves.</p>
<h2>The labour of on-demand grocery</h2>
<p>In supermarkets that offer on-demand home delivery, the work of the personal shopper takes on a faster pace. For Woolworths employees, for instance, an UberEats order can drop in at any time, setting off an alarm until the order is accepted and picking begins. As one personal shopper explains:</p>
<blockquote>
<p>We get this weird dinging sound that everyone dreads. You have to pick that order within the half hour or within the hour … it can drop in at any time. So if you’re sitting there having lunch for an hour, you still have to go do it because you’ve got that KPI to hit.</p>
<p>All the (scanner) guns in the store drop that sound. So it reverberates through the store. The customers can’t hear it because they don’t know what it is. But all of us know what it is.</p>
</blockquote>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/474481/original/file-20220718-24-3l6g5g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/474481/original/file-20220718-24-3l6g5g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/474481/original/file-20220718-24-3l6g5g.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/474481/original/file-20220718-24-3l6g5g.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/474481/original/file-20220718-24-3l6g5g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/474481/original/file-20220718-24-3l6g5g.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/474481/original/file-20220718-24-3l6g5g.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Serving up urgent orders to couriers from gig economy platforms like DoorDash and UberEats has a significant impact on supermarket workers.</span>
<span class="attribution"><span class="source">DoorDash</span></span>
</figcaption>
</figure>
<p>The on-demand orders must be prioritised alongside existing orders, requiring the personal shopper to juggle competing time crunches simultaneously. </p>
<blockquote>
<p>It’s urgent, and they just pop out of nowhere. So you don’t really know when they’re coming until they’re there. It’s super stressful. I dislike them immensely.</p>
</blockquote>
<h2>Enter the gig worker</h2>
<p>Once the order is picked from the supermarket aisles, the employee hands it over to a gig worker for home delivery. Supermarket staff say their interactions are brief and often impersonal. </p>
<blockquote>
<p>It’s a complete mess. You have no idea who’s coming to pick up these things. And it’s just people showing up with their headphones in showing you that they’ve got this order on their phone. There’s no real rhyme or reason to any of it.</p>
</blockquote>
<p>For supermarket workers, gig workers are neither colleagues nor customers, yet they play an essential role in home delivery and customer service. </p>
<p>When things go awry, however – such as a missing bag or broken eggs – it’s the supermarket staff who field those complaints. Similarly, when personal shoppers run behind schedule it has punitive flow-on effects for gig workers. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/coles-and-woolworths-are-moving-to-robot-warehouses-and-on-demand-labour-as-home-deliveries-soar-166556">Coles and Woolworths are moving to robot warehouses and on-demand labour as home deliveries soar</a>
</strong>
</em>
</p>
<hr>
<p>The on-demand model may, by design or otherwise, pit two groups of workers against each other, fostering frustrations at both ends. </p>
<blockquote>
<p>Most of the time they’re pretty good. They deal with it. It’s just those bad times where we might be behind and then they don’t deal with it very well.</p>
</blockquote>
<h2>A new labour regime</h2>
<p>At first glance the partnerships between supermarkets and gig economy platforms look like the supermarket is outsourcing the work of delivery. </p>
<p>But this is a simplification: in fact, the traditional companies are bringing the precarious and on-demand labour of the gig workers inside their own firm, and making it legitimate through formal partnerships. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/474407/original/file-20220717-43859-vda9cd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/474407/original/file-20220717-43859-vda9cd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=562&fit=crop&dpr=1 600w, https://images.theconversation.com/files/474407/original/file-20220717-43859-vda9cd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=562&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/474407/original/file-20220717-43859-vda9cd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=562&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/474407/original/file-20220717-43859-vda9cd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=706&fit=crop&dpr=1 754w, https://images.theconversation.com/files/474407/original/file-20220717-43859-vda9cd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=706&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/474407/original/file-20220717-43859-vda9cd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=706&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The ‘dedicated team’ behind Woolworth’s Metro60 app includes traditionally employed staff and gig workers.</span>
<span class="attribution"><a class="source" href="https://www.metro60.com.au/">Woolworths</a></span>
</figcaption>
</figure>
<h2>How do supermarket employees view on-demand grocery?</h2>
<p>Most personal shoppers I spoke with are ambivalent or wary of the expanding on-demand services.</p>
<blockquote>
<p>The people that I work with either love it or hate it. They like it because it’s different, you never get bored, and you’ve always got something to do. But that’s why other people hate it. Because you don’t get a chance to just stand for a second, you always have to be doing something.</p>
</blockquote>
<p>Some enjoy the fast pace and express satisfaction in meeting targets and making the customer happy. </p>
<blockquote>
<p>We’ve all gotten to the point now where we’re attuned, we hear the chime, we know what actions we need to take. So it almost happens autonomously. And before you know it, here comes another one and you just keep going.</p>
</blockquote>
<p>Others expressed concerns about burnout, unpredictable workloads and an increasing pace of work. </p>
<blockquote>
<p>It’s obviously a very high-demand, high-speed job. That’s probably the biggest frustration. We also have pick rates, essentially like Amazon, where we get told this is how many items we should average an hour … and a lot of the time people can’t meet the average.</p>
</blockquote>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/guilt-shame-dissatisfaction-workers-and-customers-on-the-gig-economy-and-how-to-make-it-better-185502">Guilt, shame, dissatisfaction: workers and customers on the gig economy (and how to make it better)</a>
</strong>
</em>
</p>
<hr>
<p>Staff who have been in the role more than a decade have seen the pace of work speed up significantly during their tenure, and are more critical. </p>
<blockquote>
<p>You’re not a person when you walk in the door, you’re a machine. </p>
</blockquote>
<p>Some expressed broader concerns about the possibility of their role being taken over entirely by the gig economy. In the words of one shopper:</p>
<blockquote>
<p>I was a little dismayed when the whole DoorDashing started because it’s like, oh no, the gig economy is getting closer and closer. Gig stuff always … makes me uncomfortable … It’s all this whole long-term ploy to destroy some existing industry or place, or eliminate worker protections. </p>
</blockquote>
<p>Another expressed a similar sentiment:</p>
<blockquote>
<p>My biggest worry is that they start outsourcing the actual shopping procedure. I think that would be the next logical step similar to what America has with Instacart.</p>
</blockquote>
<h2>Supermarket jobs of the future</h2>
<p>All the personal shoppers I spoke with shared a pride in their work and their deep knowledge of the supermarket and its local community. How the role continues to evolve through partnerships with the gig economy is not inevitable but a matter of choice.</p><img src="https://counter.theconversation.com/content/185960/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Lauren Kelly receives funding from the Australian Research Council for PhD research on which this article is based. Lauren Kelly works with United Workers Union which has members in the supermarket supply chain.</span></em></p>As Coles and Woolworth turn to UberEats and DoorDash for fast deliveries, supermarket workers feel ‘the gig economy is getting closer’.Lauren Kate Kelly, PhD Candidate, ARC Centre of Excellence for Automated Decision-Making and Society, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1745292022-01-09T17:34:44Z2022-01-09T17:34:44ZSupermarket shortages are different this time: how to respond and avoid panic<p>Australia has experienced plenty of supermarket shortages since the COVID pandemic began. The emerging crisis now is a bit different. </p>
<p>In 2020 and 2021, empty shelves were due to spikes in demand, as shoppers responded to lockdowns by buying more toilet paper, pasta and other consumables. This disrupted the usual rhythms of predictable supply chains. Apart from the first wave in March 2020, shortages were localised. </p>
<p>Now the shortages are due to supply-side problems, and occurring (almost) nationally. As Omicron infections surge in every state apart from Western Australia, supply chains are being crippled by the sheer number of transport, distribution and shop workers now sick or required to isolate.</p>
<p>The major problem now is in transport and distribution. The Transport Workers’ Union says a <a href="https://www.abc.net.au/news/2022-01-04/food-shortages-at-major-supermarkets-covid-rises/100737066">third to half</a> of Australia’s truck drivers are off work. Woolworths chief executive Brad Banducci <a href="https://www.9news.com.au/national/coronavirus-supermarket-shortages-woolworths-coles-aldi-grappling-with-impact-of-omicron/ac3d6a2a-30f6-4905-a9f4-5067d8627053">said on Friday</a> more than 20% of distribution centre staff and more 10% of store workers are absent. </p>
<p>There are also problems in production, particularly in meat processing – an industry prone to the <a href="https://theconversation.com/treating-workers-like-meat-what-weve-learnt-from-covid-19-outbreaks-in-abattoirs-145444">spread of COVID-19</a>. Hundreds of workers in eastern states abattoirs are off work, according to Meat Industry Council chief executive Patrick Hutchinson. <a href="https://7news.com.au/news/australia/meat-industry-warns-food-shortages-imminent-unless-workers-can-access-rapid-antigen-testing-c-5182666">He has warned</a> of severe shortages within weeks due to the lack of rapid antigen tests.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/treating-workers-like-meat-what-weve-learnt-from-covid-19-outbreaks-in-abattoirs-145444">Treating workers like meat: what we've learnt from COVID-19 outbreaks in abattoirs</a>
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</em>
</p>
<hr>
<h2>A self-fulfilling crisis</h2>
<p>Then, of course, there is the response of shoppers to shortages (or the expectation of shortages). We’ve seen how this works multiple times: products disappear from shelves, people buy more in response. Fear of shortages become a self-fulfilling prophecy.</p>
<p>Coles has <a href="https://www.9news.com.au/national/coronavirus-supermarket-shortages-woolworths-coles-aldi-grappling-with-impact-of-omicron/ac3d6a2a-30f6-4905-a9f4-5067d8627053">already imposed buying limits</a> on certain meat items (except for WA) and warned customers to expect shortages for all of January. Woolworths and ALDI have not (apart from limits on hard-to-get rapid antigen tests).</p>
<p>But they might be forced to. That depends mostly on what happens in the next weeks in NSW, which plays a large role in national grocery logistics and where COVID-19 infections are surging.</p>
<p>So what to do? </p>
<h2>What you can do</h2>
<p>Open your freezer, go to your pantry. Do you have three weeks’ worth of essential items? Mince, pasta, rice, flour, beans, toilet paper? </p>
<p>I’ve been following these issues closely over the past two years. All of Australia’s supermarket supply crises were dealt with in less than three weeks. You really don’t need more than that.</p>
<p>If you don’t have three weeks’ supply, and have both the space and money to stock, go for it. If not now, because there is a shortage, then in the next opportunity. This is not about panic-buying or hoarding. I’m not suggesting you buy a year’s worth of toilet paper or tinned food. Just always have enough so you can have peace of mind next time. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/disagreeability-neuroticism-and-stress-what-drives-panic-buying-during-the-covid-19-pandemic-141612">Disagreeability, neuroticism and stress: what drives panic buying during the COVID-19 pandemic</a>
</strong>
</em>
</p>
<hr>
<h2>Supermarket restrictions</h2>
<p>The pandemic has exposed the brittleness of just-in-time supply-chain management, which over decades honed the amount of stock held by manufacturers, wholesalers and retailers to a minimum. This was fine for maximising profits in good times. Now the times call for more of a just-in-case approach, with enough flexibility to avoid the system collapsing in a crisis.</p>
<p>Supermarkets have already made changes to avoid repeats of the supply crises of 2020 and 2021 by keeping more stock on hand. But this alone can’t solve the problem. The grocery business is competitive. Floor and refrigeration space is finite. They can’t afford to overstock.</p>
<p>What they can do is move to a more decentralised system for restricting quantities of items customers can buy when shortages do occur. </p>
<p>Every store can calculate safety stock levels to protect them from supply-chain fluctuations. When an item is about to go missing from the shelves they shouldn’t have to wait for a decision from the central office to restrict quantities. They should be able to do it on the spot, while corporate headquarters works out alternatives.</p>
<p>When the problem is not lack of inventory but insufficient people to move products from warehouses to stores, the solution is visibility – letting consumers know about staff shortages, that there’s more than enough product on its way as soon as logistics allow, and that other stores are better supplied. </p>
<h2>Cooperation is key</h2>
<p>It is unlikely every store will be equally hit by labour shortages at the same time. Imagine evolving to a point where a Coles store with empty shelves informs shoppers the product is available two blocks away at the IGA. </p>
<p>For this to happen, of course, requires cooperation between competitors, and therefore easing of the usual anti-cartel rules that expressly prohibit collusion. But there is a clear precedent for this. In April 2020 the Australian Competition and Consumer Commission gave temporary authorisation to telcos, banks, medical suppliers and supermarkets <a href="https://theconversation.com/look-whos-talking-australias-telcos-banks-and-supermarkets-granted-exemption-to-cartel-laws-135303">to collaborate</a> to ensure supply of essential goods and services.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/look-whos-talking-australias-telcos-banks-and-supermarkets-granted-exemption-to-cartel-laws-135303">Look who's talking: Australia's telcos, banks and supermarkets granted exemption to cartel laws</a>
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<hr>
<p>There is a clear case for supermarkets to cooperate now – and for the foreseeable future, with the Australian Retailers Association expecting the supply chain issues to continue for <a href="https://www.news.com.au/finance/business/retail/australia-facing-meat-shortage-as-processors-face-covidinduced-labour-shortage/news-story/928ea8a1c78048c7892d7af493f83d86">at least 12 months</a>.</p>
<p>Both federal and state governments can help set the rules of engagement, and provide accurate and actionable information to give the correct dimension of the problem. They have, for example, data from past decisions such as the effect of Victoria’s <a href="https://www.abc.net.au/news/2020-08-06/what-does-cut-in-victoria-abattoirs-output-mean-for-supermarkets/12530570">restrictions on abattoirs</a> in 2020. </p>
<p>If everyone is ready, doing what they can, we may reach a culture of resilience in Australia where empty shelves in supermarkets is but a bitter memory.</p><img src="https://counter.theconversation.com/content/174529/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>A/Prof Flavio Macau is affiliated with the Australasian Supply Chain Institute (ASCI)</span></em></p>In 2020 and 2021 empty supermarket shelves were due to spikes in demand. Now it’s a supply-side issue. The solutions, though, are substantially the same.Flavio Macau, Associate Dean Teaching & Learning, Edith Cowan UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1528222021-01-21T18:50:42Z2021-01-21T18:50:42ZThe rise and rise of Aldi: two decades that changed supermarket shopping in Australia<figure><img src="https://images.theconversation.com/files/391081/original/file-20210323-17-1mreav6.jpg?ixlib=rb-1.1.0&rect=481%2C229%2C2708%2C1503&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption"></span> <span class="attribution"><span class="source">anystock/Shutterstock</span></span></figcaption></figure><p>Twenty years ago, on January 25 2001, a virtually unknown German supermarket chain quietly opened its first stores in Australia.</p>
<p>The two <a href="https://www.aldiunpacked.com.au/aldis-contribution-to-new-south-wales/">stores</a> – one in Sydney’s inner-west suburb of Marrickville, the other in the outer south-west, near Bankstown Airport – were small, about a <a href="https://www.smh.com.au/business/aldis-simple-recipe-for-success-20080725-3l48.html">quarter the size</a> of a mainstream supermarket. Each stocked just 900 products, 90% of which were unknown brands. </p>
<p>Shoppers had to bring and pack their own bags themselves. To use a trolley required a “gold coin”. They didn’t seek to entice customers with “<a href="https://www.aldiloyaltycalculator.com.au/">loyalty</a>” rewards or other gimmicks.</p>
<p>Few Australian supermarket executives at the time would have considered them models for success. They couldn’t imagine the impact Aldi would have on Australia’s retail sector and shopping habits.</p>
<h2>Aldi’s history</h2>
<p>Aldi’s story began <a href="https://corporate.aldi.com.au/en/about-aldi/aldi-history/">in 1913</a>, when Anna Albrecht opened a small grocery store <a href="https://corporate.aldi.com.au/en/about-aldi/aldi-history/">in 1913</a> in the city of Essen, western Germany. </p>
<p>Her two sons, <a href="https://www.cnbc.com/2019/05/14/how-aldis-founders-turned-a-local-grocery-into-a-38-billion-fortune.html">Karl and Theo</a>, took over the business after World War II. In the impoverished conditions that followed Germany’s defeat, they focused on keeping costs, and prices, low. Among their strategies were to stock only the most popular items and avoid perishable items. </p>
<p>By the end of the decade they had <a href="https://www.lovemoney.com/gallerylist/51751/aldis-history-and-how-the-german-supermarket-is-taking-over-the-world">more than a dozen stores</a>, and by the end of the 1950s <a href="https://corporate.aldi.com.au/en/about-aldi/aldi-history/">more than 300</a>.</p>
<figure class="align-center ">
<img alt="A Karl Albrecht store in Essen, 1958. Karl was the name of Anna Albrecht's husband." src="https://images.theconversation.com/files/379671/original/file-20210120-19-1nfdgrx.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/379671/original/file-20210120-19-1nfdgrx.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/379671/original/file-20210120-19-1nfdgrx.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/379671/original/file-20210120-19-1nfdgrx.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/379671/original/file-20210120-19-1nfdgrx.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/379671/original/file-20210120-19-1nfdgrx.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/379671/original/file-20210120-19-1nfdgrx.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">One of Karl Albrecht’s stores in Essen, 1958.</span>
<span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File:Albrecht_Filiale_1958.png">Alfred Wagg Pictures/Wikimedia</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>The brothers adopted the name Aldi – combining the first two syllables of Albrecht Diskont (“discount” in German) – in <a href="https://corporate.aldi.us/en/aldi-history/">1961</a> (though accounts differ on the year). </p>
<p>At about the same time (again, accounts differ on the year) they had a major disagreement over whether to sell cigarettes. They resolved the dispute
by splitting the business into two geographic entities: Aldi Nord (“North”), run by Theo (and selling cigarettes), and Aldi Süd (“South”), run by Karl. The split was amicable, and they managed the two divisions collaboratively.</p>
<p>From the late 1960s Aldi began to expand across Europe, beginning with the acquisition of Austrian grocery chain Hofer. It opened its its first US store, <a href="https://www.winsightgrocerybusiness.com/retailers/forgotten-story-aldis-us-debut">in Iowa City</a>, in 1976, and its first British store, <a href="https://www.aldirecruitment.co.uk/about-us">in Birmingham)</a>, in 1990. </p>
<p>So by the time Aldi opened its first stores in Australia, it was a booming multinational. It now has more than 10,000 stores in 20 countries, including China.</p>
<hr>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/379883/original/file-20210121-13-1ogazs5.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Map of Aldi stores worldwide." src="https://images.theconversation.com/files/379883/original/file-20210121-13-1ogazs5.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/379883/original/file-20210121-13-1ogazs5.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=263&fit=crop&dpr=1 600w, https://images.theconversation.com/files/379883/original/file-20210121-13-1ogazs5.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=263&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/379883/original/file-20210121-13-1ogazs5.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=263&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/379883/original/file-20210121-13-1ogazs5.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=331&fit=crop&dpr=1 754w, https://images.theconversation.com/files/379883/original/file-20210121-13-1ogazs5.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=331&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/379883/original/file-20210121-13-1ogazs5.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=331&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Aldi stores worldwide. Aldi Nord territory is in blue, Aldi Süd in orange.</span>
<span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File:Aldi_world_map.png">LnG91/Wikimedia Commons</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<hr>
<h2>Aldi’s growth in Australia</h2>
<p>In coming to Australia, Aldi pounced on a gap in the grocery retail market. </p>
<p>The “food discounter” model had been dominated by now defunct <a href="https://australianfoodtimeline.com.au/franklins-founded/">Franklins</a> and <a href="https://www.colesgroup.com.au/about-us/?page=our-history">Bi-Lo</a> (owned by Coles).
By the late 1990s, however, these chains had messed with their “no-frills” model through attempts to go <a href="https://www.afr.com/companies/franklins-with-frills-is-living-dangerously-19970707-kb0no">upmarket</a>. It proved disastrous. Franklins went into terminal decline. Coles abandoned the <a href="https://www.theage.com.au/business/coles-to-rename-rebrand-20060801-ge2to8.html">Bi-Lo brand</a> in 2006.</p>
<p>Aldi expanded quickly. By mid-2003 it had 38 stores in New South Wales and six in Victoria. By 2011, it had <a href="https://www.smh.com.au/business/booming-aldi-steps-up-store-wars-20111002-1l3sz.html">251 stores</a>. By early 2013, <a href="https://retailanalysis.igd.com/news/news-article/t/aldi-australia-expanding-to-new-states/i/6295">more than 280</a>, and had expanded to Canberra. </p>
<p>It overtook the IGA group to become the third-biggest player in Australia’s supermarket sector by the end of 2013 – taking <a href="https://www.roymorgan.com/findings/5427-market-share-narrows-between-coles-woolworths-while-aldi-makes-gains-201402120013">10.3% of all grocery dollars</a> (with Coles having 33.5% and Woolworths 39%). Its first stores in <a href="https://retailworldmagazine.com.au/aldi-south-australia/">South Australia</a> and <a href="https://insideretail.com.au/news/aldi-launches-in-western-australia-201606">Western Australia</a> came in 2016. </p>
<p>It now has more than 500 stores and a 12.4% share of Australia’s <a href="https://www.statista.com/topics/6399/supermarkets-and-grocery-retail-in-australia/">A$110 billion</a> food and grocery sector (according to the most recent data from <a href="http://www.roymorgan.com/findings/8336-fresh-food-and-grocery-report-december-2019-202003230634">Roy Morgan</a>).</p>
<hr>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/379687/original/file-20210120-17-15xlr8.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/379687/original/file-20210120-17-15xlr8.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/379687/original/file-20210120-17-15xlr8.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=440&fit=crop&dpr=1 600w, https://images.theconversation.com/files/379687/original/file-20210120-17-15xlr8.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=440&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/379687/original/file-20210120-17-15xlr8.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=440&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/379687/original/file-20210120-17-15xlr8.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=553&fit=crop&dpr=1 754w, https://images.theconversation.com/files/379687/original/file-20210120-17-15xlr8.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=553&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/379687/original/file-20210120-17-15xlr8.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=553&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<hr>
<p>In 2020 Aldi was named <a href="https://www.canstarblue.com.au/stores-services/supermarkets">Australia’s best supermarket</a> by consumer review website Canstar Blue (the seventh time in a decade), and <a href="https://www.bandt.com.au/its-official-bunnings-is-australias-most-trusted-brand-with-coles-the-big-mover/">second-most trusted brand</a> (after Bunnings) by Roy Morgan.</p>
<p>Its practices have influenced how the other supermarkets do business. In particular it has forced competitors to increase their own “private label” (or home-brand) products, introduce “<a href="https://theconversation.com/phantom-brands-haunting-our-supermarket-shelves-as-home-brand-in-disguise-67774">phantom brands</a>”, and promote ever-changing “<a href="https://www.news.com.au/lifestyle/food/eat/coles-launches-fortnightly-best-buys-deals-to-rival-aldis-weekly-special-buys/news-story/38791cc3e43b7acc40b549fa7524e192">special buy</a>” general merchandise ranges.</p>
<h2>Private and phantom labels</h2>
<p>In 2004 private labels comprised <a href="https://coriolisresearch.com/pdfs/coriolis_private_label_in_australia.pdf">an estimated 9%</a> of the products Coles and Woolworths stocked. By 2019 they made up <a href="https://www.afr.com/companies/retail/coles-signs-private-label-deal-with-sainsbury-s-20191108-p538vi">30% of Coles’ sales</a>. Woolworths has similarly increased its private-label range, due explicitly to pressure from <a href="https://www.smh.com.au/business/woolies-braced-for-fight-20130304-2fgwy.html">Aldi’s arrival and expansion</a>.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/love-them-or-loathe-them-private-label-products-are-taking-over-supermarket-shelves-98465">Love them or loathe them, private label products are taking over supermarket shelves</a>
</strong>
</em>
</p>
<hr>
<p>Notably, Aldi sells no “ALDI” branded products. Instead it trades in <a href="https://storebrands.com/aldi-private-brand-powerhouse">phantom brands</a>, such as “Belmont” ice cream, “Radiance” cleaning product and “Lacura” skin care. These brands are intended overcome perceptions of private label items being lower quality.</p>
<p>In <a href="https://www.retail-week.com/grocery/analysis-woolworths-australia-launches-phantom-brand-in-battle-with-aldi/7009930.article">2016</a>, Woolworths launched its own range of phantom brands. Coles followed suit in <a href="https://www.9news.com.au/national/coles-woolworths-aldi-changing-home-brands-to-slicker-packaging/478d7a3c-8ced-4285-aeab-1d58c9e1688f">2020</a> with brands including “Wild Tides” tuna and “KOI” toiletries.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/phantom-brands-haunting-our-supermarket-shelves-as-home-brand-in-disguise-67774">Phantom brands haunting our supermarket shelves as home brand in disguise</a>
</strong>
</em>
</p>
<hr>
<h2>Special buys</h2>
<p>The bigger supermarkets have also been forced to emulate Aldi’s drawcard of bi-weekly “special buys” – heavily discounted items not normally sold in supermarkets. These <a href="https://www.canstarblue.com.au/health-beauty/buy-aldi-special-buy/">have included</a> televisions, lawn mowers, vacuum cleaners, motorcycle jackets, luggage and (curiously for a country like Australia) ski gear.</p>
<p>There are always <a href="https://www.choice.com.au/shopping/everyday-shopping/supermarkets/articles/aldi-special-buys-called-bait-advertising-160218">limited quantities</a> and shoppers regularly experience disappointment. Despite this – indeed because of this – shoppers will queue and keep coming back. These quirky, seasonal, limited-stock items create excitement and FOMO – <a href="https://www.heraldsun.com.au/news/victoria/inside-the-aldi-cult-following-and-the-secret-behind-the-supermarkets-success/news-story/b5350d3f3d1dfbe044e00e0ced3a7fbf">fear of missing out</a>.</p>
<p>In June 2020, Coles launched its own fortnightly “<a href="https://www.news.com.au/lifestyle/food/eat/coles-launches-fortnightly-best-buys-deals-to-rival-aldis-weekly-special-buys/news-story/38791cc3e43b7acc40b549fa7524e192">special buys</a>”.</p>
<h2>Unapologetically Aldi</h2>
<p>While its competitors have emulated Aldi in several ways, the German chain remains a very different no-frills operation. </p>
<p>It hasn’t bothered with investing in the <a href="https://au.finance.yahoo.com/news/confirmed-self-service-checkouts-not-coming-aldi-australia-005341537.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAIBCvlH3fl2r4RuU8SIaKmX8NpTxJNHHWe76sBT0XKML9SQjYhB6aiJEPe2CtH9GqhnIERojtDu2pWvZIh3lKqHcCCx0PaxbpMMxEouRDdhNkr3ZFvlhYG0gWGrnS7ScFqkRNtD7qq-w4P103nUVVFBVsfXojQhupcCbPS20Noa1">self-service checkouts</a> that are now ubiquitous in other stores. It continues to offer only long conveyer belts and <a href="https://www.news.com.au/finance/business/retail/how-checkout-workers-are-able-to-scan-items-fast-at-german-retailer-aldi/news-story/cd1b45f7568bf7d09351bedd21d79d30">seated register operators</a>. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-economics-of-self-service-checkouts-78593">The economics of self-service checkouts</a>
</strong>
</em>
</p>
<hr>
<p>Nor does Aldi have plans to facilitate online deliveries, in which the two supermarket giants have <a href="https://theconversation.com/covid-19-has-changed-the-future-of-retail-theres-plenty-more-automation-in-store-139025">invested heavily</a>.</p>
<p>It never had to cope with <a href="https://www.sbs.com.au/news/caved-too-quickly-coles-slammed-over-plastic-bag-backflip">customer backlash</a> over phasing out free single-use plastic bags either. Because it never offered free shopping bags, always charging 15 cents for them.</p>
<p>So Aldi continues to be an exception to the rule in Australian supermarket retailing. It history suggests that’s a recipe for continued success.</p><img src="https://counter.theconversation.com/content/152822/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Since opening its first Australian stores on January 25 2001, Aldi has profoundly influenced the supermarket landscape.Gary Mortimer, Professor of Marketing and Consumer Behaviour, Queensland University of TechnologyLouise Grimmer, Senior Lecturer in Retail Marketing, University of TasmaniaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1438952020-08-04T04:53:18Z2020-08-04T04:53:18ZWhat Victoria’s abattoir rules mean for the supply and price of meat<p>With Victoria’s declaration of a state of disaster and imposition of Stage 4 restrictions, many Melburnians have returned to panic buying. Supermarket shelves across the city have been stripped of canned goods, fresh vegetables and meat. </p>
<p>The meat buying, at least, makes some sense. </p>
<p>After aged care homes, meat-processing facilities have been a major contributor to Victoria’s COVID-19 outbreak. Hundreds of coronavirus cases have been <a href="https://www.stockandland.com.au/story/6851265/jbs-reopens-its-doors/">linked to about a dozen sites</a>, with the biggest outbreaks at those in Melbourne’s outer western and northern surburbs. </p>
<p>There were expectations following the state government’s lockdown announcement on Sunday that these facilities might be closed completely, along with the other business restrictions announced on Monday.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/melbourne-non-essential-retailers-closed-as-morrison-unveils-pandemic-leave-143835">Melbourne non-essential retailers closed, as Morrison unveils pandemic leave</a>
</strong>
</em>
</p>
<hr>
<p>That didn’t happen. But the state’s <a href="https://www.aussiefarms.org.au/facilities/food/abattoirs?state=VIC">70-plus meat-processing facilities</a> will be required to reduce their production capacity by one-third. </p>
<p>They must also implement, in the words of <a href="https://www.sheepcentral.com/victorian-meat-processors-to-cut-production-under-new-covid-19-rules/">premier Daniel Andrews</a>, “some of the most stringent safety protocols that have been ever put in place in any industrial setting”, including workers dressing “as if they were a health worker – gloves and gowns, masks and shields.”</p>
<p>This is going to affect the supply of meat to Victorian supermarkets, and prices. But thankfully not for long.</p>
<h2>Why meat processors?</h2>
<p>Processing meat is the opposite of an assembly line. It’s a disassembly line, the equivalent of auto workers pulling apart cars – removing the wheels, doors, seats, engine and so on – to sell the parts. Now imagine each car is slightly different, and must be taken apart in a slightly different way, at fast pace.</p>
<p>Automating such work is difficult. It is complex and intensive manual labour. Lots of people work close together, in a hard environment, for long hours, in cold and dry spaces. These factors make it easy for COVID-19 to spread. </p>
<p>The Victorian government’s directive that meat-processing facilities reduce output by one-third is to ensure workplace changes such as gaps between shifts, more physical distancing, and more attention to measures such as wearing personal protective equipment and not sharing cutting equipment. </p>
<p>So production will go at a slower pace. Output will be lower, and the per-unit cost of packaging meat products for consumers will be higher.</p>
<figure class="align-center ">
<img alt="Slaughterhouse workers processing meat." src="https://images.theconversation.com/files/351017/original/file-20200804-24-15u9o8s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/351017/original/file-20200804-24-15u9o8s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/351017/original/file-20200804-24-15u9o8s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/351017/original/file-20200804-24-15u9o8s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/351017/original/file-20200804-24-15u9o8s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/351017/original/file-20200804-24-15u9o8s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/351017/original/file-20200804-24-15u9o8s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Slaughterhouse meat workers.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>Synchronising the system</h2>
<p>Quality and price are key purchasing decisions for most meat shoppers, and the meat industry has been geared to providing fresh produce at lowest cost.</p>
<p>Getting your favourite beef, lamb, chicken and pork cuts to your local supermarket or neighbourhood butcher is a complex game. Meat processing and distribution centres work out how much to produce, where to deliver and when to do it with great precision, planning up to 90 days ahead. They must synchronise supplies from farmers with demand from retailers. </p>
<p>Think of the system’s smooth operation as being like keeping a roomful of clocks synchronised. </p>
<p>If one clock fails, no problem. You can fix it. But what if a handful more clocks fail before you can fix it, and then dozens more fail? In a short time there will be so many faulty clocks that coordination is compromised. Eventually you won’t even know what the right time is. </p>
<p>Reducing capacity in one or two abattoirs for a few days could be worked around with minimal effects to consumers. But there’s no quick fix to reducing capacity in all of them for six weeks. </p>
<p>Supplies for some meat products will almost certainly be lower, and prices could increase. This is most likely to occur for the most common and popular meat cuts, like T-bone steaks or chicken drumsticks. If your preference is offal or giblets, though, you may not have a problem.</p>
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Read more:
<a href="https://theconversation.com/disagreeability-neuroticism-and-stress-what-drives-panic-buying-during-the-covid-19-pandemic-141612">Disagreeability, neuroticism and stress: what drives panic buying during the COVID-19 pandemic</a>
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<h2>What is the good news?</h2>
<p>Yes, there is good news. </p>
<p>First, thanks to refrigerated transport, meat processors in other states can help meet lower production in Victoria. The industry has some flexibility to move from north to south, from west to east. </p>
<p>Second, supermarkets have been quick to bring restrictions back to prevent the panic buying and hoarding that make shortages even worse. Coles and Woolworths have already <a href="https://7news.com.au/sunrise/on-the-show/coles-responds-to-concerns-melbourne-is-facing-a-major-meat-shortage--c-1211460">imposed two-pack limits</a> on meat packages (and other products).</p>
<p>Third, to hoard meat you need freezer capacity, and it’s quite possible those disposed to stockpiling still have frozen meat from the first COVID-19 wave. </p>
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Read more:
<a href="https://theconversation.com/dont-panic-again-heres-why-melbournes-supermarket-shortages-will-quickly-pass-142288">Don't panic (again): here's why Melbourne's supermarket shortages will quickly pass</a>
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<p>Fourth, supermarkets and hundreds of smaller operators such as butchers will be affected in different ways at different times. Finding what you want may simply require looking in more than one shop. </p>
<p>Fourth, there are options. Not just between different fresh products such as beef, chicken, pork, lamb and fish, but between preserved, frozen and canned alternatives.</p>
<p>So it might be just a bit harder to have your preferred choice of meat for dinner in the coming days. But the situation won’t be as dire as some fear.</p><img src="https://counter.theconversation.com/content/143895/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Flavio Romero Macau is affiliated with the Australasian Supply Chain Institute - ASCI.</span></em></p><p class="fine-print"><em><span>Ferry Jie receives funding from Western Australia Government, Department of Jobs, Tourism, Science and Innovation, iMOVE Australia; Department of Industry, Science, Energy and Resources; Australasian Centre for Rail Innovation; City of Joondalup, Meat and Livestock Australia (2017).
Ferry Jie is affiliated with Chartered Institute of Logistics and Transport in Australia (CILTA) and Supply Chain and Logistics Association of Australia (SCLAA).</span></em></p>Yes, there will be temporary meat shortages in Victoria, but not for long.Flavio Macau, Senior Lecturer in Supply Chain Management and Global Logistics, Edith Cowan UniversityFerry Jie, Asssociate Professor in Supply Chain and Logistics Management, Deputy Director, Centre for Innovative Practice, Edith Cowan UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1416122020-07-01T07:08:50Z2020-07-01T07:08:50ZDisagreeability, neuroticism and stress: what drives panic buying during the COVID-19 pandemic<p>Panic buying has returned to Australia in the wake of its second-biggest city experiencing a spike in COVID-19. The Victorian government has reimposed stay-at-home restrictions on 36 of Melbourne’s <a href="https://www.domain.com.au/news/melbournes-321-suburbs-ranked-for-liveability-20151106-gkq447/">321 suburbs</a> in response. </p>
<p>Once again supermarket stores are being emptied of toilet paper and other consumables.</p>
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Read more:
<a href="https://theconversation.com/grattan-on-friday-scott-morrison-undeterred-on-covid-re-opening-despite-rise-in-toilet-paper-index-141456">Grattan on Friday: Scott Morrison undeterred on COVID re-opening despite rise in toilet paper index</a>
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<p>But this panic buying isn’t just in affected areas. It’s not even limited to Victoria. Empty supermarket shelves have been reported in <a href="https://www.canberratimes.com.au/story/6808916/signs-of-panic-buying-at-canberra-shops-again/#gsc.tab=0">Canberra</a>, <a href="https://www.southernhighlandnews.com.au/story/6809134/toilet-paper-sales-surge-at-southern-highlands-supermarkets/?cs=262">Mittagong</a> in the New South Wales southern highlands, and <a href="https://www.westernadvocate.com.au/story/6810411/here-we-go-again-signs-of-new-panic-buying-in-bathurst/">Bathurst</a> in the NSW central tablelands.</p>
<p>As a preventative measure Coles and Woolworths have <a href="https://www.abc.net.au/news/2020-06-26/woolworths-coles-re-introduces-toilet-paper-limit/12397374">reintroduced nationwide limits</a> on the amount of toilet paper shoppers can buy. Coles is also limiting packets of pasta, rice and long-life milk nationally, while Woolworths has so far done so only for Victoria. </p>
<p>Prime Minister Scott Morrison has called the panic buying “<a href="https://au.news.yahoo.com/stop-being-ridiculous-p-ms-powerful-words-to-panic-buyers-093253639.html">ridiculous</a>”, and previously dubbed it “<a href="https://www.abc.net.au/news/2020-03-18/coronavirus-panic-buying-pm-tells-people-to-stop-hoarding/12066082">unAustralian</a>”. </p>
<p>But are admonishments helpful in stopping panic buying? </p>
<p>That depends on what motivates people to panic buy. The COVID-19 pandemic has given us the chance to ask.</p>
<h2>What motivates panic buying?</h2>
<p>We’ve surveyed more than 600 Australians, first in April then again in June, about their stockpiling behaviour, attitudes and feelings.</p>
<p>Our results show about 17% of shoppers admitted to panic buying in April. About 6% were continuing to stockpile two months later, joined by an equal number who did not buy in April and feared missing out again.</p>
<p>Panic buyers and stockpilers were more likely to be younger and under financial and personal stress. A number of personality traits were also significant predictors. Those less agreeable, more anxious and less able to cope with uncertainty were more likely to panic buy.</p>
<p>These findings suggest panic buyers are likely to feel a lack of control in their lives and worry more about COVID-19. Stocking up on items gives them a sense of security in one part of their lives. They are likely to be less cooperative and considerate of others.</p>
<h2>Studying panic buying</h2>
<p>We recruited our 600 participants via consumer-survey company <a href="https://business.pureprofile.com/">Pure Profile</a>, which ensured our sample was representative of the Australian population. </p>
<p>We asked if they had “stockpiled”, and how much, in response to COVID-19, as well as questions about their income, education attainment, attitudes and personality. </p>
<p>Participants indicated their agreement with more than 100 statements such as:</p>
<ul>
<li>I am someone who is emotionally stable, not easily upset </li>
<li>I spend too much time following COVID-19 related news coverage </li>
<li>Obtaining food and basic household items has been a major source of stress. </li>
</ul>
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Read more:
<a href="https://theconversation.com/why-are-people-stockpiling-toilet-paper-we-asked-four-experts-132975">Why are people stockpiling toilet paper? We asked four experts</a>
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<h2>Agreeableness</h2>
<p>The strongest predictor of “early” panic buying was low “agreeableness”.</p>
<p>Agreeableness describes how motivated people are to cooperate with and consider the feelings of others. It is typically expressed as polite and compassionate behaviour. We measured this trait by asking respondents to agree or disagree with statements such as “I am someone who is sometimes rude to people” and “I am someone who can be cold and uncaring”. </p>
<p>Measures of agreeableness predict a range of considerate and helpful behaviours such as <a href="https://www.nature.com/articles/s41598-017-02952-1">treating others fairly and helping others in need</a>. </p>
<p>In our results, 23% of low scorers on agreeableness reported panic buying compared with 14% of high scorers. </p>
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Read more:
<a href="https://theconversation.com/the-science-of-being-nice-how-politeness-is-different-from-compassion-81819">The science of being 'nice': how politeness is different from compassion</a>
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<h2>Neuroticism</h2>
<p>The second strongest predictor was high “neuroticism”. </p>
<p>Neuroticism describes a person’s experience of negative emotions such as <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5428182/">worry, anxiety and uncertainty</a>. Those with this trait tend to agree with statements such as “I often feel sad” or “I am temperamental and get emotional easily”. </p>
<p>High scorers experience negative emotions more intensely and more often. Our data shows that 22% of high scorers on neuroticism reported panic buying compared to 12% who scored low.</p>
<p>Our results also suggest these individuals are driven to stockpile to limit their need to go to the supermarket as much as fear of store supplies running out.</p>
<h2>Financial stress</h2>
<p>Stress also appears to be a significant factor. Panic buyers in our survey were significantly more likely to have been stood down or had their hours reduced due to COVID-19. </p>
<p>Those 32 and younger were about 40% more likely to have panic bought than those older. This is likely due to the economic impacts hitting younger workers hardest, as well as young families generally facing more financial and domestic strain. </p>
<p>Panic buyers also reported more time worrying about COVID-19, and more conflict in their household as a result of the pandemic.</p>
<h2>Fear of missing out</h2>
<p>The fear of missing out was the main predictor of respondents stockpiling in June. More than half these “late” stockpilers did not do so in April. They were far more likely to agree with the statement “Difficulties in obtaining basic household has been a major source of stress” than the April panic buyers.</p>
<p>So while panic buying is indeed more common in “selfish” people, it might also serve as a coping mechanism. People who experience higher levels of instability and uncertainty – due to personality disposition and/or their life circumstances have been disrupted – are most likely to panic buy and stockpile. </p>
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Read more:
<a href="https://theconversation.com/a-toilet-paper-run-is-like-a-bank-run-the-economic-fixes-are-about-the-same-133065">A toilet paper run is like a bank run. The economic fixes are about the same</a>
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<p>Stockpiling gives such individuals some sense of control and reduces one source of potential stress in their lives – the possible difficulty to obtain essential food and household products.</p>
<p>With more outbreaks of panic buying predicted over the next 12 months as new COVID-19 hotspots emerge, we need more strategies than condemnation to address that behaviour.</p><img src="https://counter.theconversation.com/content/141612/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>What motivates people to panic buy and stockpile goods like toilet paper? The COVID-19 pandemic has given us the chance to find out.Peter O'Connor, Professor, Business and Management, Queensland University of TechnologyJeromy Anglim, Lecturer in Research Methods in Psychology, Deakin UniversityLuke Smillie, Associate Professor in Personality Psychology, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1390252020-06-24T11:19:02Z2020-06-24T11:19:02ZCOVID-19 has changed the future of retail: there’s plenty more automation in store<figure><img src="https://images.theconversation.com/files/343416/original/file-20200623-188886-125sqlc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Australian supermarket giant Woolworths has announced its <a href="https://www.theaustralian.com.au/business/companies/woolies-to-spend-780m-on-hitech-warehouses/news-story/abe34d1ecf4af7500b2bd391bff4b584">single biggest investment</a> in logistics infrastructure, spending A$780 million to replace up to 1,300 workers with robots. </p>
<p>It plans to build one semi-automated and one fully automated distribution centre in south-west Sydney. About <a href="https://www.woolworthsgroup.com.au/page/media/Latest_News/woolworths-group-to-transform-nsw-supply-chain-network-with-investment-in-new-high-tech-distribution-centres/">650 jobs</a> will be created at the new centres, to open in 2024. Three existing centres (two in Sydney, one in Melbourne) will close as a result. </p>
<p>Woolworths’ chief supply chain officer, Paul Graham, emphasised <a href="https://www.itnews.com.au/news/woolworths-to-build-automated-distribution-centres-in-nsw-549603">the safety benefits</a> of automation:</p>
<blockquote>
<p>Cutting-edge automation will build tailored pallets for specific aisles in individual stores – helping us improve on-shelf product availability with faster restocking, reducing congestion in stores, and enabling a safer work environment for our teams with less manual handling.</p>
</blockquote>
<p>In these COVID-conscious times that’s the obvious spin. </p>
<p>But it’s true this is a response to the changes being wrought on the retail sector by COVID-19.</p>
<p>The principal change is a matter of pace. COVID-19 has turbocharged the shift to online shopping. Even as social-distancing rules ease, this trend will consolidate. Many bricks-and-mortar shops are in trouble, particularly those in shopping centres. </p>
<p>Retail will also be shaped by how COVID-19 has changed our shopping behaviour, with thrift and value being important. </p>
<h2>Shopping online is the new norm</h2>
<p>In April, 5.2 million Australians shopped online, according to Australia Post’s <a href="https://auspost.com.au/content/dam/auspost_corp/media/documents/2020-ecommerce-industry-report.pdf">2020 eCommerce Industry Report</a>. The Australian Bureau of Statistics estimates those sales were worth A$2.7 billion, <a href="https://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/8501.0Main%20Features3Apr%202020?opendocument&tabname=Summary&prodno=8501.0&issue=Apr%202020&num=&view=">11.1% of all physical retail sales</a>, compared with 7.1% in March 2019.</p>
<p>This <a href="https://www.afr.com/companies/retail/grocery-deliveries-delayed-as-online-shopping-soars-20200309-p5483v">sharp hike in demand</a> exposed weaknesses in retailers’ <a href="https://home.kpmg/au/en/home/insights/2020/04/coronavirus-COVID-19-retail-survival-and-revival.html">online capabilities</a>. For example, crushing online demand meant both Woolworths and major rival Coles temporarily <a href="https://insidefmcg.com.au/2020/03/17/woolies-and-coles-suspend-online-orders-as-shoppers-descend-on-sites/">suspended</a> their online shopping services. </p>
<p>More automated fulfilment centres are part of meeting these online demands. Of course, such investments were already on the radar.</p>
<p>In March 2019, Coles announced <a href="https://www.colesgroup.com.au/media-releases/?page=coles-enters-partnership-with-ocado">an exclusive deal</a> to use the “end-to-end online grocery shopping solution” developed by Ocado, a British online supermarket chain that has no stores, only warehouses. Its technology spans the online shopping experience, automated fulfilment and home delivery. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/343628/original/file-20200624-132380-1yrvzge.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/343628/original/file-20200624-132380-1yrvzge.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/343628/original/file-20200624-132380-1yrvzge.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/343628/original/file-20200624-132380-1yrvzge.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/343628/original/file-20200624-132380-1yrvzge.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/343628/original/file-20200624-132380-1yrvzge.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/343628/original/file-20200624-132380-1yrvzge.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">An Ocado warehouse in Wimbledon, southwest London.</span>
<span class="attribution"><span class="source">Willy Barton/Shutterstock</span></span>
</figcaption>
</figure>
<p>The Coles plan included two new “highly automated” customer fulfilment centres in Melbourne and Sydney, to be ready in 2023. Coles also announced plans for two new automated distribution centres in Queensland and NSW, costing A$700 million, <a href="https://www.afr.com/companies/retail/redundancies-loom-as-coles-eyes-automation-spend-to-catch-woolworths-20181004-h168qt">in October 2018</a>.</p>
<p>Woolworths itself has already opened the Melbourne South Regional Distribution Centre, whose automated features are hyped in the following promotional video.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/yO6xZo3_p4s?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
</figure>
<p>So these latest moves are part of a trend, albeit one unexpectedly accelerated by COVID-19. And once consumers try new channels, <a href="https://journals.sagepub.com/doi/full/10.1509/jm.09.0362?">studies</a> show, they are likely <a href="https://link.springer.com/article/10.1007/s40547-014-0031-y">to stick with them</a>. </p>
<h2>The future is dark</h2>
<p>At the other end of the supply chain, the shift to online shopping has created demand for “<a href="https://www.businessinsider.com.au/dark-stores-online-retail-coronavirus-2020-4">dark stores</a>” – essentially, stores without customers. These smaller, decentralised facilities, located in suburbs rather than industrial parks, are designed to pick and dispatch online orders quickly. </p>
<p>Woolworths opened its first dark store <a href="https://www.smh.com.au/business/companies/woolworths-opens-first-onlineonly-dark-store-20140811-102lh0.html">in Sydney in 2014</a>. <a href="https://www.smh.com.au/business/companies/dark-stores-coles-trials-shops-with-no-customers-20160622-gpowau.html">Coles</a> opened its first in Melbourne in 2016. Existing stores are also being repurposed as dark stores. In April 2020, Australia’s Kmart temporarily converted three stores to use <a href="http://mhdsupplychain.com.au/2020/04/17/kmart-closes-stores-to-convert-them-into-distribution-centres/">as fulfilment centres</a>. </p>
<p>Such moves may become permanent, as shoppers demand faster delivery times and physical store assets become less viable as “traditional” retail businesses.</p>
<p>Existing stores are also being adapted to respond to customer demands for faster, more efficient online shopping. In January 2020, Woolworths began building its first “<a href="https://www.woolworthsgroup.com.au/page/media/Press_Releases/carrum-downs-the-first-woolworths-in-australia-to-get-cutting-edge-online-shopping-technology/">eStore</a>” - an automated facility adjoining its supermarket in Carrum Downs, Melbourne. </p>
<h2>Fewer, smaller stores</h2>
<p>As online shopping increasingly provides greater revenue streams for retailers, more physical store closures are also on the cards.</p>
<p>In May, Kmart’s owner, Wesfarmers, announced it would <a href="https://theconversation.com/dont-blame-covid-19-targets-decline-is-part-of-a-deeper-trend-139205">shut 75</a> of its Target stores (and convert the rest to Kmart stores). Also looking to downsize are Australian department store icons <a href="https://www.smh.com.au/business/companies/myer-better-off-with-fewer-stores-geoff-wilson-20200330-p54f77.html">Myer</a> and David Jones, which have accelerated their plans to reduce floor space <a href="https://www.smh.com.au/business/companies/david-jones-accelerates-store-closures-as-sales-slump-35-per-cent-20200527-p54wyj.html">20% by 2025</a>.</p>
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Read more:
<a href="https://theconversation.com/dont-blame-covid-19-targets-decline-is-part-of-a-deeper-trend-139205">Don't blame COVID-19: Target's decline is part of a deeper trend</a>
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<p>Footwear giant Accent Group – which owns more than a dozen shoe brands and has more than 500 stores in Australia and New Zealand – is planning to close <a href="https://www.9news.com.au/national/accent-to-close-28-in-shift-to-online-retail/3a547554-27f3-4413-9675-3510f7c74437">28 stores</a> and focus more on online sales. </p>
<p>As online revenues grow, expect more “right-sizing” and closures.</p>
<h2>Repurposing shopping centres</h2>
<p>All these closures will add to the woes of shopping centres. </p>
<p>Though crowds reportedly <a href="https://www.abc.net.au/news/2020-05-09/shoppers-raise-alarm-over-coronavirus-social-distancing/12231780">surged</a> back to centres when “lockdown” restrictions were eased, growing awareness that the pandemic is not over and social distancing protocols continue to <a href="https://theconversation.com/coronavirus-has-turned-retail-therapy-into-retail-anxiety-keeping-customers-calm-will-be-key-to-carrying-on-138777">create consumer anxiety</a>.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/brick-bait-three-tricks-up-retailers-sleeves-to-lure-you-back-to-physical-shops-107506">Brick-bait: three tricks up retailers' sleeves to lure you back to physical shops</a>
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<p>Until people feel safe shopping, dining and gathering in crowded public places, <a href="https://www.smh.com.au/business/markets/damaged-and-scarred-psychological-effect-of-pandemic-set-to-hold-back-economic-recovery-20200506-p54q64.html">consumer aversion</a> will remain. </p>
<p>In response to these COVID-conscious times, shopping centres will endeavour to enhance those aspects of the shopping experience, such as sensory elements and entertainment, which the online shopping experience can’t provide. </p>
<p>The retail mix will change: fewer fashion and general merchandise shops, and more services such as medical centres, offices and childcare centres. </p>
<h2>Opportunities for smaller retailers</h2>
<p>One bright spot may be for local and independent shops. </p>
<p>Smaller retailers can often adapt faster than larger ones. Smaller community pharmacies, for example, implemented social distancing and hygiene measures more easily than larger retailers, due mainly to their smaller size and having less traffic. </p>
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<strong>
Read more:
<a href="https://theconversation.com/coronavirus-shopping-tips-to-keep-you-safe-at-the-supermarket-137013">Coronavirus shopping tips to keep you safe at the supermarket</a>
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<p>There are opportunities to leverage shoppers’ desire to <a href="https://thenewdaily.com.au/finance/consumer/2020/03/19/coronavirus-small-business-support/">support</a> local shopkeepers, producers and growers. Locally made goods and services are also less likely to have long supply chains that will impede overseas deliveries while COVID-19 is uncontained.</p>
<p>But they’ll still need to sort out their online shopping experience.</p><img src="https://counter.theconversation.com/content/139025/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Louise Grimmer has received funding from Cooperative Research Centres. These are joint initiatives between government, industry and academia. The funding does not relate to this article. </span></em></p><p class="fine-print"><em><span>Gary Mortimer, Jana Bowden, Jason Pallant, and Martin Grimmer do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Woolworths’ A$780 millon investment in new automated distribution centres is a sign of how much COVID-19 has changed the way we shop. It points what’s to come in the retail sector.Gary Mortimer, Professor of Marketing and Consumer Behaviour, Queensland University of TechnologyJana Bowden, Associate Professor of Marketing and Consumer Behaviour, Macquarie UniversityJason Pallant, Lecturer of Marketing, Swinburne University of TechnologyLouise Grimmer, Senior Lecturer in Marketing, University of TasmaniaMartin Grimmer, Professor of Marketing, University of TasmaniaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1399772020-06-14T19:56:26Z2020-06-14T19:56:26ZWatch yourself: the self-surveillance strategy to keep supermarket shoppers honest<figure><img src="https://images.theconversation.com/files/339978/original/file-20200605-176550-4d7423.jpg?ixlib=rb-1.1.0&rect=0%2C84%2C5143%2C3333&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Retailers have tried many overt tactics to limit theft, such as signs that display images of CCTV cameras, threats to prosecute offenders, bag checks, <a href="https://www.news.com.au/finance/business/retail/woolworths-have-begun-weighing-items-in-the-bagging-area-again-at-selfservice-checkouts/news-story/6586309715eed2778dafdb86be027a46">checkout weighing plates</a> and <a href="https://www.news.com.au/finance/business/retail/coles-installs-imposing-new-security-screens/news-story/64a0a7fd5e67848fc38d9791bc80a0f9">electronic security gates</a>. </p>
<p>These tactics are extremely costly and have failed to stamp out retail theft. </p>
<p>Now supermarkets are trying a different tactic, that’s part overt surveillance but also encourages “self-reflection” on any impulse to exploit loopholes in the bagging and payment systems. </p>
<p>In late May Australian supermarket giant Woolworths confirmed it is trialling self-service checkout terminals with <a href="https://www.news.com.au/lifestyle/food/eat/woolworths-trialling-video-surveillance-at-selfservice-checkouts/news-story/29b75c97c5fba310071318b6ef87a459">built-in cameras</a>. They display your image as you scan your items. Rival <a href="https://au.news.yahoo.com/coles-installs-massive-cameras-stop-self-checkout-thefts-005944366.html">Coles</a> started trying the technology in <a href="https://www.news.com.au/finance/business/retail/coles-installs-cameras-at-selfserve-checkouts-to-stop-people-stealing-items/news-story/a54d11e0984e5ce07845c7eba46fe973">April 2019</a>.</p>
<p>The idea is that watching yourself scan your own groceries will reduce the temptation to steal. It is supported by research that shows the effectiveness of cues that cause us to self-focus and self-regulate. </p>
<h2>Retail theft continues to grow</h2>
<p>Since 1990, when the Australian Insitute of Criminology published extensive research on retail crime <a href="https://www.aic.gov.au/publications/crimprev/retail">and its prevention</a>, it has been widely accepted crime-related losses account for about 1% of all retail revenue. Estimates of customer theft were woolier. </p>
<p>In August 2019 the <a href="https://blog.retail.org.au/newsandinsights/customer-theft-hits-new-heights-as-retail-industry-crime-costs-businesses-3.37-billion">Australia and New Zealand Retail Crime Survey</a> came up with a specific number. It reported total crime-related retail losses amounted to 0.92% of revenue. Customer crime was 58% of that – or 0.53% of total revenue.</p>
<p>Though funded by retail technology company Checkpoint Systems, the survey sample is robust – almost a quarter of the retail industry in Australia and New Zealand. Also, the lead researcher, Emmeline Taylor, is a criminologist in the Department of Sociology at City, University of London respected for her expertise in retail crime.</p>
<h2>Costs of loss prevention</h2>
<p>Writing about her research <a href="https://theconversation.com/how-shoplifters-justify-theft-at-supermarket-self-service-checkouts-97029">in 2018</a>, Taylor tells the story of a major Australian supermarket discovering it was selling more carrots than it had in stock.</p>
<blockquote>
<p>Unfortunately this wasn’t a sudden switch to healthy eating or a desire to increase vitamin C intake, it was an early sign of a new type of shoplifter. Otherwise honest shoppers were using the self-service checkout to transact more expensive items – typically avocados – and put them through as carrots. </p>
</blockquote>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/341398/original/file-20200612-38707-1m8vk5z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/341398/original/file-20200612-38707-1m8vk5z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/341398/original/file-20200612-38707-1m8vk5z.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/341398/original/file-20200612-38707-1m8vk5z.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/341398/original/file-20200612-38707-1m8vk5z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/341398/original/file-20200612-38707-1m8vk5z.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/341398/original/file-20200612-38707-1m8vk5z.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Self-service checkouts have enabled ‘swipers’ – seemingly well-intentioned patrons engaging in routine shoplifting, says criminologist Emmeline Taylor.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<p>She termed these self-service checkout thieves “SWIPERS” – seemingly well-
intentioned patrons engaging in routine shoplifting. As the Australia and New Zealand Retail Crime Survey states: </p>
<blockquote>
<p>Their behaviour and motivations (that are often interlinked) fall into four main groups: the accidental thieves, the switchers of labels, those compensating themselves, and those that steal because they claim to have become frustrated with the process of self-checkout (e.g. triggering alerts or purchasing age-restricted items that require assistance from an employee). </p>
</blockquote>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-economics-of-self-service-checkouts-78593">The economics of self-service checkouts</a>
</strong>
</em>
</p>
<hr>
<h2>Prevention techniques</h2>
<p>The traditional approach to loss prevention involves attendants and security guards, specialised display fixtures, reinforced packaging, training, in-store signage, display alarms and more cameras. </p>
<p>More of these can prove counter-productive, as highlighted by the Australian Institute of Criminology’s analysis of <a href="https://aic.gov.au/publications/rpp/rpp120/stealing-retail-stores">local crime prevention strategies</a> in 2014. It found, for example, that introducing surveillance systems or security guards made <a href="https://aic.gov.au/publications/rpp/rpp120/stealing-retail-stores">shop staff less likely</a> to approach suspicious shoppers. </p>
<h2>Getting away with it</h2>
<p>The research by Taylor and others into the motivators of shoplifting points to the potential of another way to reinforce honest behaviour.</p>
<p>While some forms of stealing might be considered irrational – such as <a href="https://www.researchgate.net/publication/286070683_The_psychopathology_of_shoplifting_and_kleptomania">kleptomania</a> – shoplifters often rationalise their thefts. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/how-shoplifters-justify-theft-at-supermarket-self-service-checkouts-97029">How shoplifters justify theft at supermarket self-service checkouts</a>
</strong>
</em>
</p>
<hr>
<p>How much they steal comes down to their own “deviance threshold” – the point at which they can no longer justify their behaviour alongside a self-perception as a good person. This helps explains the greater frequency of shoplifting lower value items. It’s easier to justify a small “discount” on your bill. </p>
<p>If it’s just a small theft, also, the chances of getting caught are smaller. If caught, the chance of getting away – passing it off as an honest mistake, perhaps – is higher. This semi-conscious calculation is known as the “<a href="https://eprints.qut.edu.au/91385/7/91385.pdf">denial of punishment probability</a>”.</p>
<h2>You are being watched</h2>
<p>An obvious strategy for retailers is to make shoppers more aware they are being watched.</p>
<p>Research has demonstrated “eyes” images do this more effectively than images of security cameras or written reminders such as “you are being observed”. This is due to eyes triggering <a href="https://www.atlasobscura.com/articles/why-sticking-a-pair-of-eyeballs-on-a-sign-actually-changes-behavior">instincts connected to</a> our evolutionary capacity for gaze detection – sensitivity to being watched.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/super-recognisers-accurately-pick-out-a-face-in-a-crowd-but-can-this-skill-be-taught-112003">Super-recognisers accurately pick out a face in a crowd – but can this skill be taught?</a>
</strong>
</em>
</p>
<hr>
<p>But eyes signs also have their limitations. </p>
<p>Newcastle University researchers Max Ernest-Jonesa, Daniel Nettleb and Melissa Bateson did an experiment in a campus cafeteria and <a href="https://www.sciencedirect.com/science/article/pii/S1090513810001224">found</a> that posters featuring eye images resulted in less litter being left on tables than images of flowers, but less so when the café was busier.</p>
<hr>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/341438/original/file-20200612-153858-19ogbgo.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/341438/original/file-20200612-153858-19ogbgo.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/341438/original/file-20200612-153858-19ogbgo.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=419&fit=crop&dpr=1 600w, https://images.theconversation.com/files/341438/original/file-20200612-153858-19ogbgo.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=419&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/341438/original/file-20200612-153858-19ogbgo.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=419&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/341438/original/file-20200612-153858-19ogbgo.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=527&fit=crop&dpr=1 754w, https://images.theconversation.com/files/341438/original/file-20200612-153858-19ogbgo.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=527&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/341438/original/file-20200612-153858-19ogbgo.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=527&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Proportion of tables with litter left by quintile of number of people in the café at the time (1=fewest people, 5=most) under eye-image and flower-image conditions.</span>
<span class="attribution"><a class="source" href="https://www.staff.ncl.ac.uk/daniel.nettle/ernestjonesnettlebateson.pdf">Max Ernest-Jones, Daniel Nettle, Melissa Bateson</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
</figcaption>
</figure>
<hr>
<p>The more people around the more we relax. Those “eyes” can’t be watching everyone. </p>
<h2>Think of yourself</h2>
<p>A more effective tactic might be appealing to another honed evolutionary instinct: a “think of yourself” focus.</p>
<p>University of East Anglia researcher Rose Melaeady and colleagues demonstrated this with experiments using signs to encourage drivers to <a href="https://journals.sagepub.com/doi/full/10.1177/0013916517691324">turn off their engines</a> at a busy rail crossing with a two-minute average wait.</p>
<p>After an experiment just using an “watching eyes” image (with no discernible effect) they tried two signs.</p>
<p>One with set of human eyes and the words: “When barriers are down, switch off your engine”</p>
<p>The other with just the words: “Think of yourself: When barriers are down, switch off your engine.”</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/341428/original/file-20200612-93551-wl1a25.gif?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/341428/original/file-20200612-93551-wl1a25.gif?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/341428/original/file-20200612-93551-wl1a25.gif?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=781&fit=crop&dpr=1 600w, https://images.theconversation.com/files/341428/original/file-20200612-93551-wl1a25.gif?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=781&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/341428/original/file-20200612-93551-wl1a25.gif?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=781&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/341428/original/file-20200612-93551-wl1a25.gif?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=982&fit=crop&dpr=1 754w, https://images.theconversation.com/files/341428/original/file-20200612-93551-wl1a25.gif?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=982&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/341428/original/file-20200612-93551-wl1a25.gif?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=982&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="https://journals.sagepub.com/doi/full/10.1177/0013916517691324">Rose Meleady et al, Environment and Behavior, February 10 2017.</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
</figcaption>
</figure>
<p>With no sign, 20% of drivers switched off their engines. With the watching eyes sign, 30% switched off. With the “think of yourself” sign, 51% did so.</p>
<h2>Self-surveillance</h2>
<p>So the supermarkets’ self-surveillance strategy combines two tactics. First, a “traditional” external motivation to do the right thing – amplifying the <a href="https://www.researchgate.net/publication/12609065_The_Spotlight_Effect_in_Social_Judgment_An_Egocentric_Bias_in_Estimates_of_the_Salience_of_One's_Own_Actions_and_Appearance#:%7E:text=The%20Spotlight%20Effect%20in%20Social%20Judgment%3A%20An%20Egocentric%20Bias%20in,One's%20Own%20Actions%20and%20Appearance&text=This%20research%20provides%20evidence%20that,phenomenon%20dubbed%20the%20spotlight%20effect.">spotlight effect</a> with an overt reminder we are being watched. Second, it is also intended to evoke self-reflection and <a href="https://journals.sagepub.com/doi/full/10.1177/0013916517691324">self-regulation</a>. </p>
<p>These steps will likely add to concerns about personal privacy, though Woolworths and Coles say no recordings are being made.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/from-fare-evasion-to-illegal-downloads-the-cost-of-defiance-27978">From fare evasion to illegal downloads: the cost of defiance </a>
</strong>
</em>
</p>
<hr>
<p>Even if they were, though, the embrace of cashless transactions – with <a href="https://www.abc.net.au/news/2020-05-18/are-we-headed-to-a-cashless-economy-post-coronavirus/12244846">just 27% of all payments now made with cash</a> – suggests most customers aren’t overtly concerned about how much others know about their shopping habits.</p><img src="https://counter.theconversation.com/content/139977/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>To curb opportunistic shoplifting, supermarkets want you to know you are being watched. But they’re also hoping for self-reflection.Gary Mortimer, Professor of Marketing and Consumer Behaviour, Queensland University of TechnologyPaula Dootson, Senior Lecturer, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1382922020-05-17T19:57:00Z2020-05-17T19:57:00ZSupermarkets claim to have our health at heart. But their marketing tactics push junk foods<figure><img src="https://images.theconversation.com/files/335254/original/file-20200515-77247-1s2209u.jpg?ixlib=rb-1.1.0&rect=5%2C5%2C3988%2C2988&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Supermarkets like to <a href="https://www.woolworthsgroup.com.au/page/community-and-responsibility/group-responsibility/environment/inspiring-healthy-choices">portray</a> themselves as having the <a href="https://www.coles.com.au/about-coles/community">health</a> of the community at heart. And in the middle of a pandemic, we’re all grateful supermarkets are still open and, for the most part, the shelves are well stocked. </p>
<p>But our <a href="https://www.insideourfoodcompanies.com.au/supermarkets">new report</a>, published today, finds our supermarkets are overwhelmingly pushing junk foods on us rather than healthy foods.</p>
<p>They have more promotional displays and more special offers for the least healthy food options, and they tempt us to buy unhealthy products at checkouts.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/QrPBbjkdpUY?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
</figure>
<h2>Our research – what we did</h2>
<p>For our report, we surveyed more than 100 Coles, Woolworths, Aldi and independent stores in Australia.</p>
<p>In each store, we measured the shelf space allocated to different foods and how they are promoted at checkouts and end-of-aisle displays. We also looked at discounts on healthy compared with unhealthy items.</p>
<p>We categorised the healthiness of food and drinks based on the <a href="https://www.eatforhealth.gov.au/sites/default/files/content/n55_australian_dietary_guidelines.pdf">Australian Dietary Guidelines</a>, which classify foods as “five food groups” foods (healthy) and “discretionary” foods (unhealthy).</p>
<p>We analysed the findings by supermarket chain and by the level of disadvantage of the area in which each store was located.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/supermarkets-put-junk-food-on-special-twice-as-often-as-healthy-food-and-thats-a-problem-121808">Supermarkets put junk food on special twice as often as healthy food, and that's a problem</a>
</strong>
</em>
</p>
<hr>
<h2>Promotion of unhealthy food and drinks at checkouts</h2>
<p>We found 90% of staff-assisted checkouts included displays of unhealthy food and drinks. These displays typically included chocolate, confectionery, soft drinks and energy drinks.</p>
<p>The food and drinks on special at checkouts was also 7.5 times more likely to be unhealthy than healthy.</p>
<p>These results show how checkout displays encourage impulse buys of unhealthy snacks. This is in stark contrast to displays near the entrance of most stores, where fresh fruit and vegetables feature prominently.</p>
<h2>Unhealthy food is promoted all over the store</h2>
<p>The displays at the end of aisles, particularly those in high-traffic areas nearest the front of the store, are where supermarkets put their <a href="https://www.sciencedirect.com/science/article/abs/pii/S0969698917307257">biggest promotions</a>.</p>
<p>Our survey found that of all end-of-aisle displays with food and drinks, 80% had at least one type of unhealthy item. In Coles, Woolworths and independent supermarkets, there was twice as much unhealthy food as healthy food on display.</p>
<p>Around two-thirds of all specials on food and drinks were for unhealthy items. </p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/335252/original/file-20200515-77243-2loxmp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/335252/original/file-20200515-77243-2loxmp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=1048&fit=crop&dpr=1 600w, https://images.theconversation.com/files/335252/original/file-20200515-77243-2loxmp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=1048&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/335252/original/file-20200515-77243-2loxmp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=1048&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/335252/original/file-20200515-77243-2loxmp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1317&fit=crop&dpr=1 754w, https://images.theconversation.com/files/335252/original/file-20200515-77243-2loxmp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1317&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/335252/original/file-20200515-77243-2loxmp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1317&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">End-of-aisle displays are more likely to advertise unhealthy foods than healthy foods.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>It matters where you shop</h2>
<p>On the measures we looked at there was little difference between Coles and Woolworths.</p>
<p>But Aldi stores were quite different. They had fewer promotional displays and discounts overall. This means unhealthy food is not being pushed on Aldi shoppers in the same way it is at the other major chains.</p>
<p>Independent stores varied widely. On average, they were no better than Coles or Woolworths.</p>
<p>But the two healthiest stores in our study were both independent stores with abundant fresh food, and few promotional displays for unhealthy food and drinks. This tells us a healthier supermarket environment is possible.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/dont-be-fooled-supermarkets-dont-have-your-health-at-heart-28341">Don't be fooled, supermarkets don't have your health at heart</a>
</strong>
</em>
</p>
<hr>
<h2>It also matters where you live</h2>
<p>We found supermarkets allocate more shelf space to unhealthy food and drinks (chips, chocolate, confectionery, sweet biscuits, soft drinks and energy drinks) compared with fresh and frozen fruit and vegetables.</p>
<p>Critically, this was more pronounced in stores located in more disadvantaged areas. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/334241/original/file-20200512-66719-1hkmc06.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/334241/original/file-20200512-66719-1hkmc06.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=337&fit=crop&dpr=1 600w, https://images.theconversation.com/files/334241/original/file-20200512-66719-1hkmc06.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=337&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/334241/original/file-20200512-66719-1hkmc06.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=337&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/334241/original/file-20200512-66719-1hkmc06.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/334241/original/file-20200512-66719-1hkmc06.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/334241/original/file-20200512-66719-1hkmc06.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Supermarkets in lower socioeconomic areas were found to display a higher proportion of selected unhealthy food and drinks.</span>
<span class="attribution"><span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>People living with socioeconomic disadvantage have <a href="https://www.aihw.gov.au/getmedia/fe037cf1-0cd0-4663-a8c0-67cd09b1f30c/aihw-aus-222.pdf.aspx?inline=true">higher rates of diet-related diseases</a> and are <a href="https://www.cambridge.org/core/journals/public-health-nutrition/article/association-between-socioeconomic-position-and-diet-quality-in-australian-adults/48106AB58906A3D5A4B3534D670A9F4A">less likely</a> to eat healthy, nutritious food. They are also more likely to <a href="https://www.cambridge.org/core/journals/public-health-nutrition/article/discretionary-food-and-beverage-consumption-and-its-association-with-demographic-characteristics-weight-status-and-fruit-and-vegetable-intakes-in-australian-adults/689B3A1CE7E8B21680775430DED5623B">over-consume unhealthy food</a>. </p>
<p>The extent to which unhealthy food is pushed at us shouldn’t depend on the suburb in which we live.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/how-we-get-sucked-in-by-junk-food-specials-in-supermarkets-66392">How we get sucked in by junk food specials in supermarkets</a>
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</em>
</p>
<hr>
<h2>We need higher standards in Australian supermarkets</h2>
<p>The COVID-19 pandemic has highlighted the importance of supermarkets in our daily lives.</p>
<p>But when the pandemic is finally over, we will still have an <a href="https://onlinelibrary.wiley.com/doi/abs/10.5694/j.1326-5377.2010.tb03503.x">expensive national health problem</a> resulting from our unhealthy diets and high levels of <a href="https://www.aihw.gov.au/reports-data/behaviours-risk-factors/overweight-obesity/overview">obesity</a>.</p>
<p>Supermarkets can be part of the solution to that problem. They can help all Australians move towards healthier, more nutritious diets.</p>
<p>Some improvements could include:</p>
<ul>
<li><p>providing healthier checkouts that do not display chocolate, confectionery and sugary drinks</p></li>
<li><p>replacing unhealthy items with healthy food and drinks at end-of-aisle displays</p></li>
<li><p>allocating less shelf space to unhealthy items</p></li>
<li><p>offering fewer discounts on unhealthy food and drinks</p></li>
<li><p>ensuring stores in the most disadvantaged areas do not disproportionately market unhealthy food and drinks, in comparison to stores in other areas.</p></li>
</ul>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/big-supermarkets-big-on-junk-food-how-to-make-healthier-food-environments-20347">Big supermarkets, big on junk food: how to make healthier food environments</a>
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</p>
<hr>
<p>If supermarkets don’t take action to improve their practices, the government should be ready to step in to ensure the supermarket environment encourages the selection of healthier options.</p><img src="https://counter.theconversation.com/content/138292/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Gary Sacks receives funding from the National Heart Foundation of Australia, the National Health and Medical Research Council (NHMRC), the Canadian Institutes of Health Research (CIHR) and the World Health Organization (WHO). Gary Sacks is an academic partner on a healthy supermarket intervention trial that includes collaborations with Australian local government and IGA supermarkets.</span></em></p><p class="fine-print"><em><span>Adrian Cameron has received funding from the National Heart Foundation of Australia, the National Health and Medical Research Council (NHMRC), the Australian Research Council (ARC), Canadian Institutes of Health Research (CIHR) and the World Health Organization (WHO). He is an academic partner on a healthy supermarket intervention trial that includes collaborations with Australian local government and IGA supermarkets.</span></em></p><p class="fine-print"><em><span>Lily Grigsby-Duffy receives funding from a scholarship from the National Health and Medical Research Council (NHMRC) Centre for Research Excellence in Reducing Salt Intake Using Food Policy Interventions (APP1117300)</span></em></p><p class="fine-print"><em><span>Sally Schultz does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>We surveyed over 100 Coles, Woolworths, Aldi and independent stores around Australia and found supermarkets are promoting unhealthy food much more often, and more prominently, than healthier products.Gary Sacks, Associate Professor, Deakin UniversityAdrian Cameron, Associate professor, and Associate Director of the Global Obesity Centre, Deakin UniversityLily Grigsby-Duffy, PhD candidate, Deakin UniversitySally Schultz, Research fellow, Deakin UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1353032020-04-03T03:29:32Z2020-04-03T03:29:32ZLook who’s talking: Australia’s telcos, banks and supermarkets granted exemption to cartel laws<figure><img src="https://images.theconversation.com/files/325130/original/file-20200402-74895-eq8cfn.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C4343%2C2966&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>“People of the same trade seldom meet together, even for merriment and diversion,” wrote Adam Smith in <a href="https://www.adamsmith.org/the-wealth-of-nations">The Wealth of Nations</a> (published in 1776), “but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”</p>
<p>With the coronavirus crisis, though, Australia’s competition watchdog has decided a little more conversation is in the public interest.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/morrison-tells-big-business-to-show-patriotism-as-covid-19-threatens-to-hit-harder-than-gfc-133255">Morrison tells big business to show 'patriotism' as COVID-19 threatens to hit harder than GFC</a>
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</em>
</p>
<hr>
<p>The Australian Competition and Consumer Commission is lightening up on its normal competition rules by giving interim authorisation for competitors to cooperate.</p>
<p>On Wednesday the regulator <a href="https://www.accc.gov.au/media-release/nbn-co-telcos-to-coordinate-on-demand-surge-and-consumer-support-package">authorised the NBN Co</a> and the five biggest telcos (Telstra, Optus, Vodafone Hutchison, TPG and Vocus) to “work together to take measures necessary to keep Australia’s telecommunications networks operating effectively”.</p>
<p>On Tuesday it <a href="https://www.accc.gov.au/media-release/medicine-wholesalers-to-co-operate-on-access-to-pharmaceutical-products">authorised wholesalers of medicines</a> “to co-operate to facilitate distribution of essential medication and pharmacy products.</p>
<p>On Monday it <a href="https://www.accc.gov.au/media-release/banks-authorised-to-co-operate-on-loan-relief-and-services">authorised banks</a> "to co-operate to provide supplementary relief packages for individuals and businesses”.</p>
<p>And last week it <a href="https://www.accc.gov.au/system/files/public-registers/documents/Interim%20Authorisation%20Decision%20-%2023.03.20%20-%20PR%20-%20AA1000477%20Coles%20%26%20Ors.pdf">authorised the major supermarket</a> chains (Woolworths, Coles, Aldi and IGA/Metcash) to coordinate their activities to ensure the supply of retail products, particularly those in short supply.</p>
<h2>What is cartel conduct</h2>
<p>Normally a competition watchdog guards against any collaboration or collusion between competitors. There are hefty fines and even criminal penalties to deter competitors talking to each other. </p>
<p><a href="https://www.accc.gov.au/business/anti-competitive-behaviour/cartels">Cartel conduct</a> – agreements to fix prices, share markets, rid bids or control the amount of goods and services available to buyers – is arguably the biggest threat to a well-functioning competitive market. </p>
<p>Rather than competing on product quality, price and service, cartels maximise profits by agreeing to charge consumers more, pay suppliers less and putting the squeeze on other competitors. Competition officials have described cartels as “<a href="https://ec.europa.eu/commission/presscorner/detail/en/SPEECH_00_295">cancers on the open market economy</a>”.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/cartels-caught-ripping-off-consumers-should-be-hit-with-bigger-fines-78750">Cartels caught ripping off consumers should be hit with bigger fines</a>
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</em>
</p>
<hr>
<p>But these are not normal times. The normal behaviour that allows markets to function has been thrown into flux. Panic buying of toilet paper, hand sanitiser, pasta and other staples has led to significant supply shortages. Video conferencing and streaming has led to a surge in broadband data use.</p>
<p>In these “unprecedented circumstances”, the watchdog has decided the benefits of permitting competitors to cooperate to secure the supply of essentials goods outweigh the risks. </p>
<h2>Different times, different conditions</h2>
<p>History shows cartel conduct is tempting to companies in hard economic times. In fact, it’s even tempting to regulators. </p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/325142/original/file-20200403-74889-r5xbsg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/325142/original/file-20200403-74889-r5xbsg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=503&fit=crop&dpr=1 600w, https://images.theconversation.com/files/325142/original/file-20200403-74889-r5xbsg.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=503&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/325142/original/file-20200403-74889-r5xbsg.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=503&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/325142/original/file-20200403-74889-r5xbsg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=633&fit=crop&dpr=1 754w, https://images.theconversation.com/files/325142/original/file-20200403-74889-r5xbsg.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=633&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/325142/original/file-20200403-74889-r5xbsg.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=633&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A 1933 US Postage stamp commemorating the National Recovery Administration established under National Industrial Recovery Act.</span>
<span class="attribution"><a class="source" href="https://en.wikipedia.org/wiki/File:New_Deal_N.R.A._3c_1933_issue_U.S._stamp.jpg">Wikimedia</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>In 1933 the United States legalised cartel conduct with the National Industrial Recovery Act. The intention was to assist recovery from the Great Depression. Agreements to restrict output and fix prices were seen as a short-term solution to keep businesses afloat. It has since been argued the US law <a href="https://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?article=1016&context=yjreg">actually slowed the recovery</a> by converting “otherwise competitive industries into highly regulated, cartelised, and often inefficient industries”.</p>
<p>The US government’s mistake is not one the Australian Competition and Consumer Commission is making.</p>
<p>Its interim authorisations allow officials from the regulator and the federal government to monitor discussions. Every arrangement must be approved by the regulator. Everything is “out in the open”, eliminating a key feature for any cartel arrangement to succeed – secrecy. </p>
<p>Conditions now are also very different to those in 1930s America. </p>
<p>Then the issue was over-supply. Now it’s mostly a problem of undersupply, due to demand surges.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/theres-plenty-of-toilet-paper-so-why-are-people-hoarding-it-133300">There's plenty of toilet paper – so why are people hoarding it?</a>
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</em>
</p>
<hr>
<p>This is not a situation in which supermarkets, pharmaceutical companies and broadband providers have anything to gain through restricting supply. </p>
<p>They might have an interest in increasing prices. But the competition watchdog has expressly forbidden talk about retail prices.</p>
<h2>A tight leash needed</h2>
<p>European regulators are taking a similar approach to Australia. The European Commission <a href="https://ec.europa.eu/competition/ecn/202003_joint-statement_ecn_corona-crisis.pdf">has declared</a> it will not actively intervene against “necessary and temporary measures” to avoid supply shortage:</p>
<blockquote>
<blockquote>
<p>“Considering the current circumstances, such measures are unlikely to be problematic, since they would either not amount to a restriction of competition […] or generate efficiencies that would most likely outweigh any such restriction.”</p>
</blockquote>
</blockquote>
<p>Even so, there are risks. There are anti-cartel laws for good reason. The longer competitors spend working together, as Adam Smith noted, the greater the risk of conspiracy.</p>
<p>The competition watchdog will need to keep talks on a tight leash. Apart from price, it needs to ensure companies do not share information about operations and processes that would allow them to act independently in a mutually beneficial manner. This would give us exactly what cartel laws are meant to stop – higher prices.</p>
<p>Australia’s competition watchdog is arguably better equipped for this task than its European counterparts. But with more industry requests for competitors to cooperate likely, it will need to stay vigilant, making full use of its powers to monitor talks and ensure cooperation only goes on for as much, and as long, as absolutely necessary.</p><img src="https://counter.theconversation.com/content/135303/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sven Gallasch does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The Australian Competition and Consumer Commission is lightening up on its normal competition rules and allowing competitors to cooperate.Sven Gallasch, Lecturer in Law, Swinburne University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1320212020-02-20T04:20:11Z2020-02-20T04:20:11ZCriminal penalties for corporate wage theft are appealing, but won’t fix the problem on their own<p>Australian supermarket giant Coles and discount chain Target this week joined an ignominious list of large corporations caught up in “wage theft” scandals. </p>
<p>Coles <a href="https://www.theguardian.com/business/2020/feb/18/coles-underpaid-workers-by-20m-over-six-years">confessed</a> to underpaying salaried employees about A$20 million over the past six years. Target <a href="https://www.smh.com.au/business/companies/target-staff-underpaid-by-9m-wesfarmers-reveals-20200219-p5425i.html">admitted</a> to underpaying staff about A$9 million.</p>
<p>Other large companies that have underpaid employees include <a href="https://www.smh.com.au/business/companies/bunnings-reveals-underpayment-bill-of-6-1-million-20191129-p53fa4.html">Bunnings</a>, which underpaid its staff about A$4 million in superannuation entitlements, and <a href="https://www.smh.com.au/business/companies/woolworths-the-latest-perpetrator-in-the-wage-underpayment-epidemic-20191030-p535sk.html">Woolworths</a>, which underpaid employees up to A$300 million over ten years.</p>
<p>These cases – along with a string of others involving small and medium enterprises – reinforce the need for reform. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/shocking-yet-not-surprising-wage-theft-has-become-a-culturally-accepted-part-of-business-121038">Shocking yet not surprising: wage theft has become a culturally accepted part of business</a>
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</em>
</p>
<hr>
<p>Australian Attorney-General Christian Porter has said he will <a href="https://www.abc.net.au/news/2020-02-18/coles-underpays-employess-20-million-review-reveals/11974984">introduce legislation within weeks</a> to criminalise the worst cases of worker exploitation and underpayment. </p>
<p>Heavier sanctions may be appropriate. But harsher civil or criminal penalties will not, on their own, lead to greater compliance.</p>
<h2>Beyond penalties and punishment</h2>
<p>Not surprisingly, Rob Scott, the chief executive of Wesfarmers (the parent company of both Target and Bunnings), is among those opposed to penalising companies for “inadvertent administrative errors”. </p>
<p>“I’m not sure more punitive penalties are necessarily going to change behaviour at all,” <a href="https://www.smh.com.au/business/companies/target-staff-underpaid-by-9m-wesfarmers-reveals-20200219-p5425i.html">he said this week</a>. “There have been some significant issues across payroll systems in the market, which in part reflects the incredible complexity of the systems that we’re dealing with.”</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/no-a-complex-system-is-not-to-blame-for-corporate-wage-theft-126279">No, a 'complex' system is not to blame for corporate wage theft</a>
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</em>
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<hr>
<p>Even if these underpayments were not deliberate, companies were – in the words of Fair Work Ombudsman <a href="https://www.theguardian.com/australia-news/2019/nov/03/adly-checking-their-payrolls-the-ugly-truth-of-australias-underpayment-epidemic">Sandra Parker</a> – “lax and lazy” about complying with their obligations. It is hard to believe a corporation like Wesfarmers – one of Australia’s ten biggest listed companies – does not have the resources to pay people correctly. </p>
<p>Nonetheless, Scott does raise a valid point. Changing the compliance culture in Australia will not be straightforward.</p>
<p>There is much <a href="https://press.anu.edu.au/publications/regulatory-theory">research</a> that suggests promoting, achieving and sustaining compliance with the law is about much more than just penalties, punishment and deterrence. </p>
<p>There is also limited evidence to support the idea that <a href="https://www.alrc.gov.au/inquiry/corporate-crime/">criminalising</a> wage theft will alone act as a regulatory panacea. This is especially the case where underpayment is primarily committed by corporations rather than individuals.</p>
<h2>Risk of detection</h2>
<p>My colleague John Howe and I have <a href="http://www.austlii.edu.au/au/journals/SydLawRw/2017/20.html">researched employer non-compliance</a> with the Fair Work Act in the hairdressing and restaurant industries. Our findings confirm conclusions drawn in previous studies relating to environmental violations, tax evasion and cartel conduct: it is the perceived risk of detection, not the severity of the sanction, that is most likely to enhance deterrence and encourage compliance.</p>
<p>If the perception of being caught is critical, then what counts are the resources available to the Fair Work Ombudsman to strategically intervene and to be seen to be doing so - that is, by widely publicising enforcement outcomes. </p>
<p>On these points the current system has at least two vulnerabilities. These will remain even if criminal penalties are introduced and civil penalties increased. </p>
<p>First, various federal government commitments to <a href="https://www.smartcompany.com.au/business-advice/politics/budget-2019-fair-work-ombudsman-sham-contracting-crackdown/">boost funding</a> for the Fair Work Ombudsman have not resulted in any discernible increase in the number of <a href="https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/fact-sheets/about-us/powers-of-fair-work-inspectors">Fair Work inspectors</a> or other staff. </p>
<p>It is no coincidence that trade unions – the organisations that have historically supplemented government detection efforts – are struggling to keep up with demand in the sectors most prone to wage theft, such as horticulture and hospitality. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/all-these-celebrity-restaurant-wage-theft-scandals-point-to-an-industry-norm-131286">All these celebrity restaurant wage-theft scandals point to an industry norm</a>
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</em>
</p>
<hr>
<p>While Porter is <a href="https://www.sbs.com.au/news/bosses-who-underpay-workers-could-be-named-and-shamed-as-coles-face-20-million-hit">promising</a> the “most vigorous, robust and complete set of laws around wage underpayment that Australia’s ever seen”, there’s <a href="https://www.smh.com.au/politics/federal/porter-absolutely-committed-to-passing-union-busting-bill-20200129-p53vww.html">no sign</a> the government will do anything that might enhance the role of the union in this space. </p>
<p>Contraventions are generally detected by the regulator through proactive inspections and individual complaints. But most complaints are settled confidentially. This may mean quicker redress for workers, but it has limited deterrent effect. </p>
<h2>Effective reforms</h2>
<p>The prospect of criminalising wage theft grabs headlines. But in making this change it is essential <a href="https://cdn.workplaceexpress.com.au/files/2020/Compliance%20and%20Enforcement%20Discussion%20Paper.pdf">policy makers</a> do not lose sight of the total reform agenda needed to make a real difference. </p>
<p>The Fair Work Ombudsman needs sufficient resourcing and enhanced enforcement tools and detection mechanisms. Dispute-resolution and court processes for workers seeking to recover pay need to be streamlined. </p>
<p>Finally, all of this should be publicised, so employers know transgressions of workplace law – inadvertent or not – have consequences.</p>
<hr>
<p><em>Correction: this article’s conclusion has been amended to remove imputations introduced through editing. All activities of the Fair Work Ombudsman, not just possible prosecutions and penalties, need to be publicised for deterrence purposes.</em></p><img src="https://counter.theconversation.com/content/132021/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tess Hardy receives funding from the Australian Research Council for her Discovery Early Career Researcher project titled: Work in Franchises: Searching for Solutions on the Regulatory Frontier (DE180100279). </span></em></p>Research suggests harsher civil or criminal penalties will not automatically lead to greater compliance by employers with workplace laws.Tess Hardy, Senior Lecturer in Law, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1316672020-02-17T18:55:20Z2020-02-17T18:55:20ZColes says these toys promote healthy eating. I say they’re rubbish<figure><img src="https://images.theconversation.com/files/315639/original/file-20200217-11005-19p5qxk.jpg?ixlib=rb-1.1.0&rect=0%2C28%2C3822%2C2515&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>As a parent, I find it so frustrating to take my children shopping, reusable bags in hand, only to be offered plastic toys at the checkout. It’s an incredibly confusing message to be sending kids. And it seems Coles is confused too. </p>
<p>Last year the company stated it wants to be “<a href="https://www.colesgroup.com.au/media-releases/?page=1-7-billion-single-use-plastic-bags-diverted-from-landfill">Australia’s most sustainable supermarket</a>”. But with last week’s relaunch of “Stikeez” – yet another plastic collectables range off the back of their Little Shop promotion – Coles is showing dogged commitment to unsustainable marketing. </p>
<p>Stikeez are 24 plastic characters (plus four rare ones) in the shape of fruit and vegetables, aimed at encouraging kids to eat healthy food.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/why-and-how-retailers-turn-everyday-items-into-must-have-collectables-101672">Why and how retailers turn everyday items into 'must-have' collectables</a>
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<p>After <a href="https://www.change.org/p/coles-mini-collectables-are-more-plastic-waste-stop-now">petitions</a> against previous plastic “mini” campaigns by Coles and Woolworths, Coles will make the Stikeez characters returnable in store for recycling. </p>
<p>But this misses the point. Coles is generating waste needlessly in the first place. Surely it’s time to move beyond plastic freebies as a way of boosting sales?</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/315672/original/file-20200217-10995-uxpcc3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/315672/original/file-20200217-10995-uxpcc3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/315672/original/file-20200217-10995-uxpcc3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/315672/original/file-20200217-10995-uxpcc3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/315672/original/file-20200217-10995-uxpcc3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/315672/original/file-20200217-10995-uxpcc3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/315672/original/file-20200217-10995-uxpcc3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/315672/original/file-20200217-10995-uxpcc3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Coles sent almost 100,000 tonnes of waste to landfill in 2019.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>Irresponsible marketing</h2>
<p>We have a waste problem in this country. Australians are the <a href="https://www.statista.com/topics/4983/waste-generation-worldwide/">third highest producers of waste per person</a>, after the US and Canada. Some councils are having to <a href="https://www.abc.net.au/news/2019-08-06/councils-sending-thousands-of-tonnes-of-recycling-to-landfill/11385458">stockpile</a> plastic, there’s a federal plan to <a href="https://www.environment.gov.au/protection/waste-resource-recovery/waste-export-ban">phase out exporting waste overseas</a> and we have high rates of <a href="https://www.abc.net.au/news/2019-03-02/forget-recycling-we-need-to-fix-wish-cycling/10829542">contamination of recyclables</a>. </p>
<p>And Coles, one of Australia’s supermarket giants, sent almost <a href="https://www.colesgroup.com.au/FormBuilder/_Resource/_module/ir5sKeTxxEOndzdh00hWJw/file/Coles_Sustainability_Report_2019.pdf">100,000 tonnes</a> of waste to landfill in 2019. That’s 274 tonnes per day. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/stop-shaming-and-start-empowering-advertisers-must-rethink-their-plastic-waste-message-123579">Stop shaming and start empowering: advertisers must rethink their plastic waste message</a>
</strong>
</em>
</p>
<hr>
<p>But after their Little Shop collection provoked a consumer backlash, Coles took steps to reduce waste generated from their latest campaign. Stikeez wrapping contains partially recycled content, and Coles is providing in-store collection points where Stikeez can be returned and repurposed into shoe soles, in partnership with <a href="https://asga.com.au/sos/">Save Our Soles</a>. </p>
<p>Certainly this is preferable to throwing the items into the rubbish, but repurposing the plastic is not without environmental cost. Fuel is required to transport the waste and the process of repurposing plastic uses energy.</p>
<p>What’s more, asking shoppers to bring back their Stikeez puts the onus on consumers, rather than the company, to dispose of the items responsibly. And as we’ve seen by the <a href="https://www.packagingcovenant.org.au/documents/item/2179">low rates of recycling of soft plastics</a> on a national level – recycling soft plastics is also offered in store – it’s far more convenient to throw items in the bin.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/315665/original/file-20200217-11017-1dbgqqv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/315665/original/file-20200217-11017-1dbgqqv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/315665/original/file-20200217-11017-1dbgqqv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/315665/original/file-20200217-11017-1dbgqqv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/315665/original/file-20200217-11017-1dbgqqv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/315665/original/file-20200217-11017-1dbgqqv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/315665/original/file-20200217-11017-1dbgqqv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/315665/original/file-20200217-11017-1dbgqqv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Coles haven’t publicised data about how many collectables they will produce.</span>
<span class="attribution"><span class="source">Alpha/Flickr</span>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span>
</figcaption>
</figure>
<p>Coles is also missing the point of the consumer backlash. When a company already generates huge quantities of waste in its core business and says it wants to be Australia’s most sustainable supermarket, it cannot generate additional waste on plastic marketing. </p>
<h2>Boosting the bottom line</h2>
<p>Last year Coles’ Little Shop put many parents offside. But Coles earned around <a href="https://thewest.com.au/business/retail/coles-takes-lead-over-grocer-rival-woolworths-as-little-shop-collectables-frenzy-adds-200m-in-extra-sales-ng-b88972993z">A$200 million in extra revenue</a> as a result of the original promotion. </p>
<p>Coles reported an increase in the first quarter of 2019 in sales of 5% and gained a competitive advantage over rival Woolworths, which managed only 1.5% in the same period. Obviously the bump in sales was too hard for Coles to resist.</p>
<p>It’s difficult to get an accurate figure on what waste this latest Stikeez campaign will generate. Coles haven’t publicised data about how many collectables they will produce. And waste contractors to Coles haven’t revealed how many collectables ended up in landfill last year, though there have been reports of Little Shop items <a href="https://www.news.com.au/finance/business/retail/aussie-slams-coles-little-shop-campaign-after-spotting-toy-in-indonesia/news-story/f1982b32614ba3db9ac9c1935be17a0d">ending up on beaches in Bali</a>.</p>
<p>Last year, Coles said <a href="https://www.adnews.com.au/news/coles-little-shop-campaign-faces-a-plastic-waste-petition#ZMHllRBqheYgECKL.99">94%</a> of Little Shop collectables were either kept or given to family or friends. But University of Tasmania marketing expert Louise Grimmer <a href="https://www.smartcompany.com.au/industries/retail/coles-woolworths-plastic-collectibles/">discredited</a> this data, saying it was not based on any meaningful longitudinal research that would allow such claims.</p>
<h2>Stikeez undermines Coles’ sustainability efforts</h2>
<p>If organisations produce plastic for marketing purposes, it’s difficult to see how we can achieve plastic recycling rates of <a href="https://wastemanagementreview.com.au/australias-2025-national-packaging-targets-revealed/">70% by 2025</a>. This target – set by federal and state governments and which Coles has signed on to meet – also stipulates the removal of “problematic and unnecessary” single use plastic packaging. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/315673/original/file-20200217-11000-f6pa99.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/315673/original/file-20200217-11000-f6pa99.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/315673/original/file-20200217-11000-f6pa99.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/315673/original/file-20200217-11000-f6pa99.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/315673/original/file-20200217-11000-f6pa99.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/315673/original/file-20200217-11000-f6pa99.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/315673/original/file-20200217-11000-f6pa99.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/315673/original/file-20200217-11000-f6pa99.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Coles’ Little Shop promotion faced petitions from people concerned about the plastic waste it generated.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<p>Federal Assistant Minister for Waste, Trevor Evans, said finding a sustainable way to manage plastics was a <a href="https://www.smh.com.au/national/australia-warned-it-must-expand-plastic-recycling-by-up-to-400-per-cent-20200124-p53uft.html">major challenge</a> and requires a coordinated effort. As a powerful household brand, Coles must unequivocally be part of this effort.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/how-recycling-is-actually-sorted-and-why-australia-is-quite-bad-at-it-121120">How recycling is actually sorted, and why Australia is quite bad at it</a>
</strong>
</em>
</p>
<hr>
<p>Coles’ <a href="https://www.colesgroup.com.au/sustainability/?page=environment">environmental policy</a> says it’s “committed to doing business in an environmentally responsible manner”. But plastic freebies fly in the face of this policy.</p>
<h2>Better waste regulation</h2>
<p>Voluntary initiatives for companies to reduce packaging and plastic waste, which <a href="https://www.packagingcovenant.org.au/news/business-and-government-unite-to-tackle-waste-challenge">Coles have signed on to</a>, have not produced meaningful results. </p>
<p>Currently <a href="https://www.theguardian.com/environment/2019/mar/03/only-a-third-of-australias-plastic-packaging-waste-gets-recycled">only one-third</a> of all plastic packaging in Australia is recycled. </p>
<p>Overseas countries have moved away from voluntary frameworks to more structured and enforceable regulations to reduce plastic production and waste. In fact, <a href="https://www.theguardian.com/environment/2019/mar/27/the-last-straw-european-parliament-votes-to-ban-single-use-plastics">Europe voted to ban single use plastics</a> last year. </p>
<p>As long as Australia lags on waste regulation, organisations such as Coles will continue to contravene their own environmental policies.</p>
<hr>
<p>The Conversation contacted Coles for comment. Its response is as follows:</p>
<blockquote>
<p>Customers have told us that they use Stikeez as a fun tool to encourage kids to eat more types of fresh foods. The collectibles form part of the Coles Fresh 5 Challenge which encourages kids to eat all the Five Food Groups daily. We made changes to the Stikeez campaign this year to ensure it’s more environmentally sustainable. </p>
<p>Stikeez collectibles, including those customers have from last year, can now be recycled at all Coles supermarkets. We have partnered with Australian recycling group Save our Soles so that Stikeez can be recycled through the same process that is used to recycle footwear in Australia since 2010 to create useful products like anti-fatigue mats, gym matting, retail flooring and carpet underlay.</p>
</blockquote><img src="https://counter.theconversation.com/content/131667/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Carla Liuzzo does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Stikeez, the latest collection of plastic collectables from Coles, flies in the face of the company’s plan to become Australia’s most sustainable supermarket.Carla Liuzzo, Sessional Lecturer, School of Business, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1226402019-09-15T20:17:14Z2019-09-15T20:17:14ZA loaf of bread and a packet of pills: how supermarket pharmacies could change the way we shop<figure><img src="https://images.theconversation.com/files/292337/original/file-20190913-190026-w27h4g.jpg?ixlib=rb-1.1.0&rect=7%2C14%2C991%2C651&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Supermarket pharmacies have been around in the US, UK and mainland Europe for years. But will Australia follow?</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/shopping-basket-pills-concept-buying-drugs-1289871286?src=-1-2">from www.shutterstock.com</a></span></figcaption></figure><p>On the way home, you wander into the supermarket for a loaf of bread. But before you reach the bread aisle, you drop in your prescription at the supermarket pharmacy. Shopping done, you pick up your pills on the way out.</p>
<p>Across the US, UK and mainland Europe, supermarket pharmacies are becoming the norm. But in Australia, they’re banned.</p>
<p>The Commonwealth government is negotiating the <a href="https://www1.health.gov.au/internet/main/publishing.nsf/Content/New-7th-Community-Pharmacy-Agreement">seventh Community Pharmacy Agreement</a> with pharmacists, which outlines how community pharmacy is delivered over the next five years, who delivers it and where.</p>
<p>So could pharmacies in supermarkets be an option for Australia?</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/explainer-what-is-the-community-pharmacy-agreement-38789">Explainer: what is the Community Pharmacy Agreement?</a>
</strong>
</em>
</p>
<hr>
<h2>How common are they?</h2>
<p>Overseas, pharmacies have been in supermarkets for decades. In the UK, supermarkets like <a href="https://www.asda.com/about/instore/pharmacy">ASDA</a>, <a href="https://assets.publishing.service.gov.uk/media/56e1a52d40f0b6037900001d/Tesco_hearing_summary.pdf">Tesco</a>, <a href="https://my.morrisons.com/help/information/store-services/pharmacy/">Morrisons</a> and <a href="https://www.sainsburys.co.uk/webapp/wcs/stores/servlet/gb/groceries/get-ideas/our-instore-services/--sainsburys-pharmacy?storeId=10151&langId=44&krypto=3Yh4GQ%2BNdq51nNqI8mxTmkZXe9Ggb9L33GTajzfwdGXhiQftJrJArZAib4hw%2Bs8JTxwLH2HfrQCChmYTBIAbS7BEz2U5FalmUXfV%2FK4wt6OhdFjJrMlhiZMBhuu2s45yNiOQDTkMs%2BONJUT5MWYlSGhWL5pH5YQM9gRqD0wFloM%3D&ddkey=https%3Agb%2Fgroceries%2Fget-ideas%2Four-instore-services%2F--sainsburys-pharmacy">Sainsbury’s</a> have them. And so do <a href="https://www.walmart.com/cp/pharmacy-services/1088604">Walmart</a>, <a href="https://www.kroger.com/topic/pharmacy">Kroger</a> and <a href="http://www.publix.com/pharmacy-wellness/pharmacy/pharmacy-services">Publix</a> in the US.</p>
<p>Canada’s largest supermarket Loblaw <a href="https://www.thestar.com/business/2010/05/04/loblaw_plans_drugstore_expansion.html">announced plans</a> in 2010 to expand more aggressively into the pharmacy business. It later bought pharmacy chain <a href="https://www.newswire.ca/news-releases/loblaw-companies-limited-completes-acquisition-of-shoppers-drug-mart-corporation-514006661.html">Shoppers Drug Mart</a>.</p>
<h2>Arguments against</h2>
<p>The <a href="https://www.guild.org.au/__data/assets/pdf_file/0022/5386/supermarket-pharmacies.pdf">Pharmacy Guild of Australia argues</a> pharmacies in supermarkets means community pharmacies would be unable to compete, supermarkets would put shareholders’ interests ahead of patients, and consumer protection would be lost. Such critics argue supermarkets would push smaller players out of the market, limiting consumer choice and access. </p>
<p>The Guild also suggests it would be hypocritical for supermarkets to run pharmacies when <a href="https://www.guild.org.au/news-events/news/2013/12/19/supermarkets-and-health-care-don-t-mix">they rely on</a> cigarette and alcohol sales.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/relaxing-pharmacy-ownership-rules-could-result-in-more-chemist-chains-and-poorer-care-122628">Relaxing pharmacy ownership rules could result in more chemist chains and poorer care</a>
</strong>
</em>
</p>
<hr>
<p>Overseas, there is public support for small, independently run community pharmacies over supermarket-owned ones.</p>
<p>For instance, in 2013 <a href="https://www.cheshire-live.co.uk/news/chester-cheshire-news/residents-rallied-behind-helsby-pharmacy-5191264">almost 2,000 people petitioned against</a> supermarket giant Tesco, fearing an existing pharmacy across the road would be “bulldozed” out of business.</p>
<h2>Arguments for</h2>
<p>The main arguments for pharmacies in supermarkets seem to be they would offer the public a <a href="https://www.retailwire.com/discussion/would-you-go-to-walmart-to-see-a-doctor/">cheaper and more convenient service</a>.</p>
<p>For instance, <a href="https://corporate.walmart.com/newsroom/2005/01/04/wal-mart-unveils-24-hour-pharmacies">Walmart</a> employs more than 10,000 pharmacists across 3,000 retail pharmacies throughout the US and launched a 24 hour pharmacy service over a decade ago. Then it began dispensing generic medications for as <a href="https://corporate.walmart.com/newsroom/2006/09/20/wal-mart-cuts-generic-prescription-medicines-to-4">little as US$4</a>.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/is-pharmacy-the-final-frontier-for-supermarkets-5919">Is pharmacy the final frontier for supermarkets? </a>
</strong>
</em>
</p>
<hr>
<p>Supermarkets also seem committed to supporting pharmacies in store, despite tough times. In 2019, Tesco, which runs 300 in-store pharmacies, <a href="https://www.chemistanddruggist.co.uk/news/tesco-pharmacy-staff-9000-job-cuts">reported</a> no pharmacy staff positions would be lost when 9,000 store positions became redundant.</p>
<p>There are also <a href="https://www.news.com.au/finance/business/retail/a-chemist-can-own-a-supermarket-but-supermarkets-cant-own-a-pharmacy/news-story/fe97c42c3d2b55bbb613559cbf194cc1">claims of hypocrisy</a>. Why does existing Australian legislation prevent a supermarket from owning a pharmacy, but not a pharmacy from owning a supermarket?</p>
<h2>What might work in Australia?</h2>
<p>If Australia follows international trends, we might consider two models:</p>
<ul>
<li>straight-out ownership, where a supermarket owns a chain of pharmacies and employs pharmacists to run them, or </li>
<li>a strategic alliance, where a pharmacy chain, like Chemist Warehouse, has smaller versions of its stores inside a supermarket. </li>
</ul>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/292346/original/file-20190913-35596-1bt65lt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/292346/original/file-20190913-35596-1bt65lt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/292346/original/file-20190913-35596-1bt65lt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=900&fit=crop&dpr=1 600w, https://images.theconversation.com/files/292346/original/file-20190913-35596-1bt65lt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=900&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/292346/original/file-20190913-35596-1bt65lt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=900&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/292346/original/file-20190913-35596-1bt65lt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1130&fit=crop&dpr=1 754w, https://images.theconversation.com/files/292346/original/file-20190913-35596-1bt65lt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1130&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/292346/original/file-20190913-35596-1bt65lt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1130&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">In-store pharmacies might be convenient, but is that enough to convince policy makers they’re right for Australia?</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/pharmacy-pickup-area-237587">from www.shutterstock.com</a></span>
</figcaption>
</figure>
<p>Examples of straight-out ownership include Sainsbury’s in the UK and Walmart in the US. This arrangement allows them to sell these assets at a later stage. </p>
<p>This is what happened with Sainsbury’s, which <a href="https://www.theguardian.com/business/2015/jul/29/sainsburys-sells-pharmacy-business-celesio-125m">sold its 281-store pharmacy business</a> to Celesio, the owner of the Lloyds Pharmacy chain, for £125m in 2015. Sainsbury’s indicated the move would enable further growth, while extending their pharmacy services to customers.</p>
<p>In an example of a strategic alliance, UK pharmacy chain Boots and supermarket Waitrose <a href="https://www.campaignlive.co.uk/article/experts-weigh-marketing-benefits-waitrose-boot-tie-up/941645?src_site=brandrepublic">agreed in 2009 to stock each other’s products</a>. </p>
<p><a href="https://www.boots.com/stores/6313-lichfield-waitrse-ws13-6rx">Boots supplied</a> health care, pharmaceutical products and services, like flu jabs and medical check-ups to Waitrose, and Waitrose supplied food to Boots. Pharmacies in 13 Waitrose stores were also re-branded “Boots Pharmacy”.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/why-australian-supermarkets-continue-to-look-to-the-uk-for-leadership-71562">Why Australian supermarkets continue to look to the UK for leadership</a>
</strong>
</em>
</p>
<hr>
<p>However, existing legislation prevents either option in Australia unless changes are made in the new Community Pharmacy Agreement. This is because <a href="https://www.guild.org.au/news-events/news/forefront/v08n16/ownership-a-foundation-stone">current pharmacy ownership rules</a> prevent supermarkets or anyone (other than a pharmacist) from owning a pharmacy.</p>
<p>If ownership rules were lifted, but <a href="https://www1.health.gov.au/internet/main/publishing.nsf/Content/DDB409EBB18FCE8FCA257BF0001D3C0C/$File/Pharmacy%20Location%20Rules%20Applicants%20Handbook%20December%202018.pdf">location</a> rules remained, supermarkets would be prevented from operating pharmacies opening within 1.5km of one another. </p>
<p>This means if Coles had an in-store pharmacy, then Woolworths across the road, could not operate one, and vice versa. And if there was already a pharmacy in the neighbourhood, neither could open one, even if ownership rules were relaxed. </p>
<h2>Are we set for regulation or liberalisation?</h2>
<p>The <a href="https://www.guild.org.au/">Pharmacy Guild of Australia</a>, which represents owners of community pharmacies, and the <a href="https://www.psa.org.au/">Pharmaceutical Society of Australia</a>, which represents individual pharmacists, both support current ownership rules — strong regulation over ownership and location.</p>
<p>However, pharmacy giant Chemist Warehouse and Ramsay Health Care (which owns pharmacies as well as private hospitals), <a href="http://competitionpolicyreview.gov.au/files/2015/03/Competition-policy-review-report_online.pdf">say</a> ownership rules are redundant and ineffective. And they’re not alone.</p>
<p>Critics of the current Community Pharmacy Agreement <a href="https://grattan.edu.au/wp-content/uploads/2018/05/208-2016-09-23-grattan-institute-submission.pdf">argue</a> over-regulation of pharmacies, particularly surrounding ownership and location, limits competition and growth.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-right-prescription-pharmacy-sector-in-dire-need-of-reform-39642">The right prescription: pharmacy sector in dire need of reform</a>
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<p>And in 2015 the <a href="http://competitionpolicyreview.gov.au/final-report/">Harper Report</a> into competition policy recommended:</p>
<blockquote>
<p>[…] pharmacy ownership and location rules should be removed in the long-term interests of consumers. They should be replaced with regulations to ensure access to medicines and quality of advice regarding their use that do not unduly restrict competition.</p>
</blockquote>
<p>European countries seem to be moving towards deregulation. In 2017 Italy <a href="https://www.hlregulation.com/2017/08/02/italy-opens-the-door-to-corporate-ownership-of-pharmacies-a-revolution-for-the-italian-pharma-distribution/">passed legislation</a> to allow corporate entities to own a pharmacy business, and also increased the number of pharmacies a proprietor may own.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/292339/original/file-20190913-190044-1tczc4s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/292339/original/file-20190913-190044-1tczc4s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/292339/original/file-20190913-190044-1tczc4s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/292339/original/file-20190913-190044-1tczc4s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/292339/original/file-20190913-190044-1tczc4s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/292339/original/file-20190913-190044-1tczc4s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/292339/original/file-20190913-190044-1tczc4s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/292339/original/file-20190913-190044-1tczc4s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">In the US, in-store pharmacies in supermarkets are common, convenient and can offer cheaper products. But current Australian pharmacy ownership rules ban them.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/shopping-basket-pills-concept-buying-drugs-1289871286?src=-1-2">from www.shutterstock.com</a></span>
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<p>So what are the impacts of deregulation? If we look at <a href="https://www.sciencedirect.com/science/article/abs/pii/S0168851009002875">evidence</a> from Europe, when the UK relaxed ownership and location rules, pharmacies operated more efficiently. Pharmacies also had more freedom to set prices for over-the-counter products and offered a wider range of services. </p>
<p>Yet, the same research also found where there was stronger regulation, such as in Spain, consumer access to pharmacy improved, as new pharmacies were opened based on geographic, demographic or needs-based criteria. Simply, if there was already one pharmacy servicing a neighbourhood, they didn’t need another.</p>
<h2>Is Australia likely to see supermarket pharmacies?</h2>
<p>Whether Australia is likely to see supermarket pharmacies any time soon is open to debate. </p>
<p>In a speech to the Pharmacy Guild’s national conference in 2019, federal health minister Greg Hunt <a href="https://www.guild.org.au/news-events/news/2019/minister-hunt-delivers-support-for-community-pharmacy">said</a> there would be no change to the ban on locating pharmacies within supermarkets.</p>
<p>However, other powerful groups are calling for change. These include the <a href="https://ama.com.au/media/new-working-group-look-pharmacy-agreement">Australian Medical Association</a>, which wants the regulations changed to allow broader ownership of pharmacy businesses.</p>
<p>If supermarkets were to guarantee <a href="https://www1.health.gov.au/internet/main/publishing.nsf/Content/New-7th-Community-Pharmacy-Agreement">sufficient controls</a> — such as to ensure the safe use of medicines, staff were properly trained and there were safeguards to ensure equitable access for elderly patients, Aboriginal and Torres Strait Islander people, particularly people living in rural and remote areas — it would be hard to argue for existing rules about pharmacy ownership and location.</p>
<hr>
<p><em>Update (Sep 20, 2019): The lead author’s disclosure statement has been updated to reflect his past research in the pharmacy and supermarket sectors, as well as his past employment.</em></p><img src="https://counter.theconversation.com/content/122640/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Gary Mortimer has conducted and published research in the pharmacy and supermarkets sectors, and for the National Retail Association. Before his academic appointment, he was employed for more than 25 years in the retail sector. His consumer behaviour research spans retail channels including supermarkets, pharmacy and off-price retailers.</span></em></p><p class="fine-print"><em><span>Louise Grimmer does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>If Australia follows international trends and allows supermarkets to open pharmacies, what are the effects on neighbouring pharmacies? And when does running a business mean health care suffers?Gary Mortimer, Professor of Marketing and Consumer Behaviour, Queensland University of TechnologyLouise Grimmer, Lecturer in Retail Marketing, Tasmanian School of Business and Economics, University of TasmaniaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1016722018-08-22T20:04:00Z2018-08-22T20:04:00ZWhy and how retailers turn everyday items into ‘must-have’ collectables<figure><img src="https://images.theconversation.com/files/232816/original/file-20180821-30578-jh4tvc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Our collections are a part of us and our life story, and the act of collecting holds a certain comfort.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Coles’ recent “<a href="https://shop.coles.com.au/a/a-national/promo/little-shop-online">Little Shop collectables</a>” promotion has proved a hit with consumers, with entire sets of the toy products selling online for <a href="https://www.ebay.com.au/sch/i.html?_from=R40&_nkw=coles+little+shop&_sacat=0&_sop=16">exorbitant prices</a>.</p>
<p>This success is interesting given recent conversations and media coverage around <a href="https://theconversation.com/why-coles-plastic-bag-backflip-leaves-us-worse-off-than-before-100891">plastic bag bans</a> and <a href="https://theconversation.com/green-is-the-new-black-why-retailers-want-you-to-know-about-their-green-credentials-99073">reducing packaging in retailing</a>. But campaigns such as these are linked with the psychology about why some of us love to collect and why some items become collectable.</p>
<p><a href="https://thepsychologist.bps.org.uk/volume-26/edition-8/psychology-stuff-and-things">Consumer behaviour theory</a> explains that products become special, and therefore collectable, for a number of reasons including their symbolic value, mood-altering properties or instrumental importance. </p>
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Read more:
<a href="https://theconversation.com/what-makes-us-sign-up-to-subscription-boxes-87938">What makes us sign up to subscription boxes</a>
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<p>Objects get symbolic value when they remind us of particular places, events or people. Souvenirs from a holiday or a Christmas ornament from a family member, for instance. Objects may also be special because they have utilitarian or financial value.</p>
<p>When everyday, seemingly mundane items are part of a collection, they transform from the profane to the sacred. Often this special significance is incomprehensible to the outsider, as it <a href="https://pdfs.semanticscholar.org/0f6f/b5053bdf1c2be5c07218b63b243e40975ad8.pdf">does not necessarily relate</a> to the monetary value.</p>
<h2>How and why collectables work</h2>
<p>The way collectable promotions generally work is that a customer must spend a minimum set amount, say $20, to receive a “blind bag” with a collectable. And therein lies the key – the blind bag. The opaque packaging means consumers never know what they’re going to get.</p>
<p>This draws on <a href="https://www.simplypsychology.org/operant-conditioning.html">reinforcement theory</a> - the blind bag provides the excitement of receiving a reward. But the reason the bag is “blind” is to encourage repeat purchases.</p>
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<img alt="" src="https://images.theconversation.com/files/232221/original/file-20180816-2909-1mc30l2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/232221/original/file-20180816-2909-1mc30l2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=454&fit=crop&dpr=1 600w, https://images.theconversation.com/files/232221/original/file-20180816-2909-1mc30l2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=454&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/232221/original/file-20180816-2909-1mc30l2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=454&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/232221/original/file-20180816-2909-1mc30l2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=570&fit=crop&dpr=1 754w, https://images.theconversation.com/files/232221/original/file-20180816-2909-1mc30l2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=570&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/232221/original/file-20180816-2909-1mc30l2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=570&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Coles’ Little Shop collectables.</span>
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<p><a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3845016/">Intermittent reinforcement</a> is the most effective in producing desired behaviours. In other words, if shoppers know the item they’re going to receive, the excitement is diminished because the outcome is certain. </p>
<p>On the other hand, when the outcome isn’t certain, each individual blind bag purchase has the potential for providing an immediate dopamine rush. This is the same principle that leads to <a href="http://www.abc.net.au/news/health/2017-10-14/gambling-addiction-the-zone-where-winning-is-a-distraction/9044598">gambling addiction</a>.</p>
<p>After the blind bag is opened and the immediate reward over, it’s replaced by the longer term satisfaction from adding to the collection. </p>
<p>A collection becomes special as it’s added to an “<a href="https://www.sciencedirect.com/science/article/pii/S2352250X15003000">extended self</a>”. That is, special possessions become part of our identity and signal to others both who we are and who we want to be. In that sense, our collections are a part of us and our life story, and the act of collecting holds a certain comfort for the collector. </p>
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<strong>
Read more:
<a href="https://theconversation.com/when-stuff-gets-in-the-way-of-life-hoarding-and-the-dsm-5-10074">When stuff gets in the way of life: hoarding and the DSM-5</a>
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<p>While many collections are made up of common items such as toy cars or stamps (the profane), there are also those who collect very unusual and uncommon items (the sacred). </p>
<p>There are collections of items that are so rare they become particularly special and coveted, for example, items worn by celebrities, items of historical importance, rare artefacts and so forth. </p>
<p>But in terms of consumer psychology, profane items often end up becoming sacred to the collector. They become part of the consumer’s identity and their history. </p>
<p>There is genuine pleasure here the clever retailer is deliberately tapping into.</p>
<h2>An ever more common strategy</h2>
<p>Coles’ Little Shop collectables are just the latest of a number of collectable promotions run by large supermarkets and fast food giants. </p>
<p>In 2017, Woolworths launched <a href="https://www.woolworths.com.au/shop/discover/heroes">Marvel Heroes Superdiscs</a>, which involved a presentation folder to house a number of coloured plastic discs featuring Marvel heroes and villains. This followed their 2015 promotion featuring <a href="https://www.mamamia.com.au/woolworths-domino-stars/">plastic Dominos</a> decorated with Disney Pixar characters. </p>
<p>McDonalds have run similar promotions for many years, with Happy Meals featuring licensed products usually tied into new movie releases or pop culture. Many of these items end up for sale online with ‘vintage’ pieces commanding very high prices.</p>
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<strong>
Read more:
<a href="https://theconversation.com/whats-really-driving-the-future-of-retail-100518">What's really driving the future of retail?</a>
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<p>Despite the success of recent collectable campaigns, retailers need to be mindful that sometimes these promotions can backfire. </p>
<p>Woolworths received <a href="http://www.bandt.com.au/marketing/woolies-customers-rage-marvel-disc-promo-backfires">criticism</a> from customers expressing frustration at not being able to complete their Marvel disc sets. </p>
<p>In this case the supermarket giant was <a href="https://www.thecourier.com.au/story/4683582/woolworths-marvel-super-discs-are-making-parents-hulk-angry/">accused</a> of “rigging” the promotion by making one or two of the discs especially scarce and difficult to obtain. </p>
<p>In America, there’s even a case of customers themselves rigging promotions. In an intriguing story <a href="https://www.thedailybeast.com/how-an-ex-cop-rigged-mcdonalds-monopoly-game-and-stole-millions">the FBI were called</a> to investigate the case of a McDonald’s Monopoly game promotion in which US$24 million was allegedly swindled by a network of operators.</p>
<p>But we’re not likely to stop collecting any time soon, and given retailers are aware of the psychology behind collecting, we can expect to see many more of these types of promotion.</p><img src="https://counter.theconversation.com/content/101672/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Retailers have cleverly tapped into the psychological need many of us have to collect, in some cases, mundane everyday items.Louise Grimmer, Lecturer in Marketing, Tasmanian School of Business and Economics, University of TasmaniaMartin Grimmer, Professor of Marketing, Tasmanian School of Business and Economics, University of TasmaniaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1006712018-08-01T20:18:54Z2018-08-01T20:18:54ZThe secret to Aldi’s success is choosing what not to do<figure><img src="https://images.theconversation.com/files/230173/original/file-20180801-136646-1n4n4e3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The key to Aldi's strategy is a severely limited range of products.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Dick Smith has laid <a href="https://www.dicksmithfairgo.com.au/wp-content/uploads/2018/07/25.7.18-DS-closure-of-Dick-Smith-Foods-both-letters.pdf">the blame</a> for closing his Australian-made processed food lines squarely at the feet of Aldi Australia. </p>
<p>He <a href="https://www.dicksmithfairgo.com.au/wp-content/uploads/2018/07/25.7.18-DS-closure-of-Dick-Smith-Foods-both-letters.pdf">accused</a> the German retailer of “extreme capitalism” and warned the CEOs of Woolworths and Coles that “unless your companies move towards [Aldi’s limited range and high proportion of private brands], you will very likely become uncompetitive”.</p>
<p>But this betrays a fundamental misunderstanding of Aldi’s strategy and the limits of its appeal in the Australian market.</p>
<p>An important element of Aldi’s strategy is a severely limited range of “preselected” products, overwhelmingly private brands. The company’s smaller range (some 1,500 store-keeping units as opposed to 20,000 to 30,000 in a large Coles or Woolworths outlet) <a href="https://www.thecasecentre.org/educators/products/view?id=106173">has several advantages</a> – in terms of store footprints, warehousing infrastructure and supplier discounts, to name a few.</p>
<p>A proportion of these savings are <a href="https://www.choice.com.au/shopping/everyday-shopping/supermarkets/articles/cheapest-groceries-australia">passed on to consumers</a> to ensure their appeal with households wanting to stretch their shopping dollars further. </p>
<p>This strategy and disciplined execution propelled the company’s growth.</p>
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Read more:
<a href="https://theconversation.com/woolies-private-label-strategy-will-play-directly-into-the-hands-of-aldi-56914">Woolies private label strategy will play directly into the hands of Aldi</a>
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<p>From its first two stores in the Sydney suburbs of Marrickville and Bankstown, Aldi gradually expanded across the eastern seaboard. It was not until 2016 that Aldi started opening stores in South Australia and Western Australia. </p>
<p>These new territories promised significant growth opportunities while store openings in the established territories were largely restricted to gap-filling.</p>
<p><a href="http://www.roymorganonlinestore.com/Browse/Australia/Retail/Supermarket-Currency-Reports/Supermarket-Fresh-Food-Currency-Report.aspx">By 2018</a>, Aldi was operating more than 500 outlets around Australia and claiming roughly 13% of the Australian supermarket industry. Aldi’s gain in market share has overwhelmingly come at the expense of the smaller, independent supermarkets (IGA-affiliated as well as others).</p>
<p>Coles and Woolworths have chiefly <a href="https://theconversation.com/woolies-private-label-strategy-will-play-directly-into-the-hands-of-aldi-56914">responded</a> to Aldi through price cuts and by boosting their share of private brands. While competition in the Australian supermarket sector has increased, it remains a lucrative oasis in comparison to international markets.</p>
<h2>Low-hanging fruit is gone</h2>
<p>As its stores now span the entire nation, Aldi’s growth can be expected to slow down. The company is unlikely to “turn on” and overwhelm Coles and Woolworths, <a href="https://www.dicksmithfairgo.com.au/wp-content/uploads/2018/07/25.7.18-DS-closure-of-Dick-Smith-Foods-both-letters.pdf">as Smith predicts</a>, because of the inherent limitations of the Aldi formula.</p>
<p>Aldi has successfully appealed to a particular segment of the market. It is a segment of shoppers prepared to trade low prices (coupled with sound product quality) for a variety of conveniences offered by traditional supermarkets. These shoppers readily accept Aldi’s highly restrictive range of product, the lack of manufacturers’ brands, and austere stores with minimal service at the cash register or in store. </p>
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Read more:
<a href="https://theconversation.com/is-aldis-move-to-woo-cashed-up-shoppers-a-risk-42113">Is Aldi's move to woo cashed-up shoppers a risk?</a>
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<p>The company has also been successful in expanding this segment, by convincing a growing number of people to do at least part of their shopping with Aldi and accept the trade-off at the heart of its offering.</p>
<p>But the majority of Australian shoppers prefer to do (the bulk of) their shopping with the two incumbents (Coles and Woolworths <a href="https://www.ibisworld.com.au/industry-trends/market-research-reports/retail-trade/food-retailing/supermarkets-grocery-stores.html">who still account for more than two-thirds of the market</a>) as well as a shrinking number of independent supermarkets and a growing set of alternative sources such as farmers’ markets or subscription-based retailers (Costco).</p>
<h2>Strategy has limits</h2>
<p>Aldi exemplifies strategy scholar Michael Porter’s <a href="https://hbr.org/1996/11/what-is-strategy">dictum</a> that the essence of strategy is choosing what not to do. In embracing the “Aldi way”, the company has made hard strategic choices. Its strategy appeals to a sizeable segment of the Australian public. </p>
<p>But it’s turning away shoppers who value things other than what’s on offer at Aldi – larger choice, established brands, more service, plusher stores, in-store bakeries and delis or expanded fresh food sections. As a result, Aldi’s growth in Australia is going to reach its limits.</p>
<p>As far back as 2016, CEO Tom Daunt <a href="https://www.afr.com/business/retail/aldi-australia-gets-fresh-as-sales-exceed-7-billion-20161101-gsfels">acknowledged</a> that growth opportunities were slowing in existing territories. He also acknowledged the onset of cannibalisation between existing Aldi stores, a sure-fire indicator that their segment was becoming saturated:</p>
<blockquote>
<p>Increasingly those stores on the eastern seaboard are less often in virgin catchments and more often than not for the majority of those stores there is some impact on other existing Aldi stores.</p>
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<p>A <a href="https://www.smartcompany.com.au/industries/retail/aldi-stores-cannibalising-each-other-ubs/#.WoJgTNkpwa0.twitter">recent UBS report</a> also picked up the increase in cannibalisation among Aldi stores. UBS analysts suggested Aldi store cannibalisation in South Australia and Western Australia was reaching levels not far behind the more established territories.</p>
<p>This indicates that saturation might be achieved sooner in new markets, and puts <a href="https://www.theaustralian.com.au/business/companies/aldis-onslaught-on-australian-retail-may-be-slowing/news-story/566a105ec757dc85895e1f3a7799ec23">growth objectives</a> in these states in doubt.</p>
<p>Since its arrival in 2001, the company has benefited the Australian public by injecting much-needed competition into the local grocery retail scene, thereby boosting Australian consumers’ spending power. While its success is testimony to the appeal of the Aldi formula, growth will inevitably peter out and the company will not overrun Australia’s existing retail giants. </p>
<p>Aldi’s experience in Australia exemplifies the benefits as well as the limitations of clear and focussed strategy.</p><img src="https://counter.theconversation.com/content/100671/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>ALDI appeals to a particular market segment. It is unlikely to abandon it to go after Woolworths and Coles.Tom Osegowitsch, Senior Lecturer, International Business and Strategic Management, The University of MelbourneAngela McCabe, Lecturer, Management, La Trobe UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/989442018-06-27T19:56:15Z2018-06-27T19:56:15ZPlastic-free campaigns don’t have to shock or shame. Shoppers are already on board<p>With Coles and Woolworths supermarkets phasing out single-use plastic bags at their checkout counters, and Queensland and Western Australia bringing in bans on single-use plastic bags for all retailers from July 1, a long overdue step is being taken towards reducing Australia’s plastic waste. </p>
<p>However, it is only a <a href="https://www.sbs.com.au/news/why-australia-may-not-be-ready-to-ban-plastic-bags">small step</a>, and much still needs to be done to tackle the problem. </p>
<p>It is therefore useful to explore what strategies might be effective in informing the public about the issue, and in changing people’s consumption and littering behaviour.</p>
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Read more:
<a href="https://theconversation.com/in-banning-plastic-bags-we-need-to-make-sure-were-not-creating-new-problems-81253">In banning plastic bags we need to make sure we're not creating new problems</a>
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<p>Research shows that <a href="https://www.tandfonline.com/doi/abs/10.1080/08870440108405863">fear or shock tactics</a>, or strategies based on <a href="http://www.tandfonline.com/doi/abs/10.1080/02650487.1998.11104734">shame and guilt</a>, are generally not effective, and can even be <a href="https://onlinelibrary.wiley.com/doi/abs/10.1002/mar.20043">counterproductive</a>. High-threat fear appeals <a href="http://journals.sagepub.com/doi/abs/10.1177/109019810002700506">can be effective</a> provided that the target audience is already taking positive steps toward the desired behaviour change, or feel that they can easily do so. Crucially, this means that campaigns not only need to tell people about an issue, but also provide straightforward advice on what do to about it.</p>
<p>In this context, campaigns such as “<a href="https://www.youtube.com/watch?v=nK3bI4_Jjz8">Hey Tosser!</a>”, run by the New South Wales Environment Protection Authority, are ill-conceived. The problem is that encouraging the public shaming of “tossers” creates an unhelpful <a href="https://perspectra.org/2017/07/09/the-6-habits-of-a-litterbug/">stereotype</a> that doesn’t actually exist. One <a href="https://kab.org.au/wp-content/uploads/2012/05/understanding-littering-behaviour-lbs1.pdf">study</a> found that Australians are often unaware of their own littering, meaning the campaign might prompt people to identify themselves as “non-tossers” and therefore ignore the message.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/S0sbh4QWyTA?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Tosser shaming.</span></figcaption>
</figure>
<p>The author and social behaviour change expert <a href="https://scribepublications.com.au/books-authors/books/changeology">Les Robinson</a> has suggested that rather than try to scare or shame people into changing, it is more useful to create a positive buzz around change, make new behaviours easy to adopt and sustain, and foster supportive communities to help with change. </p>
<p>This means that whether we want to tackle littering or reduce reliance on plastic bags, it is important to make people feel that they are part of an inclusive movement that is supported by the community and relevant to their own lives.</p>
<p>One example is the WA government’s “<a href="https://www.der.wa.gov.au/your-environment/wa-plastic-bag-ban/491-plastic-bag-ban-shoppers">What’s your bag plan?</a>” campaign, which urges shoppers to decide how they will carry their shopping after the demise of plastic bags, by becoming either a “bagger” (reusable bags), a “boxer” (cardboard boxes), or a “juggler” (neither!).</p>
<h2>The good and the bad</h2>
<p>A recent action by Greenpeace, in which overpackaged fruit and veg were labelled with a sticker saying “I’d like this product to be plastic free” and “We love plastic-free fruit and veg”, makes it easy for consumers to view those changes as positive. There is no blaming or shaming, but rather a focus on making it easier for consumers to ask supermarkets for more environmentally conscious options. </p>
<p>On Instagram and Twitter Greenpeace is encouraging consumers to share photos of excessive packaging, under the hashtag <a href="http://www.greenpeace.org/international/story/15938/24-photos-of-ridiculous-plastic-packaging-that-will-make-you-scream-then-take-action/">#RidiculousPackaging</a>. This is a proactive way for consumers to take action, and for others to start noticing the overuse of plastic in supermarkets.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/225064/original/file-20180627-112623-4vl0rp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/225064/original/file-20180627-112623-4vl0rp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/225064/original/file-20180627-112623-4vl0rp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/225064/original/file-20180627-112623-4vl0rp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/225064/original/file-20180627-112623-4vl0rp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/225064/original/file-20180627-112623-4vl0rp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/225064/original/file-20180627-112623-4vl0rp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/225064/original/file-20180627-112623-4vl0rp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">A sticker campaign by Greenpeace Australia Pacific encourages consumers to choose plastic-free fruit and veg, and puts pressure on the supermarkets.</span>
<span class="attribution"><span class="source">Instagram/Greenpeace Australia Pacific</span></span>
</figcaption>
</figure>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/225065/original/file-20180627-112620-1kxw0di.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/225065/original/file-20180627-112620-1kxw0di.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/225065/original/file-20180627-112620-1kxw0di.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=382&fit=crop&dpr=1 600w, https://images.theconversation.com/files/225065/original/file-20180627-112620-1kxw0di.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=382&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/225065/original/file-20180627-112620-1kxw0di.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=382&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/225065/original/file-20180627-112620-1kxw0di.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=480&fit=crop&dpr=1 754w, https://images.theconversation.com/files/225065/original/file-20180627-112620-1kxw0di.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=480&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/225065/original/file-20180627-112620-1kxw0di.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=480&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Consumers are encouraged to post images of excessive plastic wrapping.</span>
<span class="attribution"><span class="source">Twitter</span></span>
</figcaption>
</figure>
<p>In contrast, other campaigns seek to emphasise the destructive effects of plastic waste. These can be eyecatching, but without a strong message that customers have the power to make a positive difference, they are unlikely to be effective in implementing sustained behaviour change. </p>
<p>The UK Marine Conservation Society’s campaign, showing a drinking straw lodged up a child’s nose (echoing a <a href="https://www.youtube.com/watch?v=4wH878t78bw">horrific viral video</a> of a sea turtle enduring the same fate), is both shocking and thought-provoking. But with no clear, positive information showing people how they can directly address the problem through changes in their own lives, viewers may simply disengage.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/225066/original/file-20180627-112623-1i51ayk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/225066/original/file-20180627-112623-1i51ayk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/225066/original/file-20180627-112623-1i51ayk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=769&fit=crop&dpr=1 600w, https://images.theconversation.com/files/225066/original/file-20180627-112623-1i51ayk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=769&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/225066/original/file-20180627-112623-1i51ayk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=769&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/225066/original/file-20180627-112623-1i51ayk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=967&fit=crop&dpr=1 754w, https://images.theconversation.com/files/225066/original/file-20180627-112623-1i51ayk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=967&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/225066/original/file-20180627-112623-1i51ayk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=967&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Eye-watering stuff.</span>
<span class="attribution"><span class="source">Marine Conservation Society UK</span></span>
</figcaption>
</figure>
<h2>Winning the war</h2>
<p>One of the most powerful campaigns in Australia in recent times has been the ABC documentary series <a href="http://www.abc.net.au/ourfocus/waronwaste">War On Waste</a>. Its success can be attributed to a clever mix of shocking information tempered with entertaining and engaging storylines; a lack of blaming and shaming of individuals (although some corporations and politicians have received their share); clear and tangible solutions that viewers can implement; and a feeling of collaborative empowerment. </p>
<p>In combination, these elements have had a <a href="http://www.abc.net.au/news/about/backstory/television/2017-07-03/backstory-war-on-waste/8664874">positive impact</a>, with the sale of reusable takeaway coffee cups rising sharply after the series aired. If my experience at my local supermarket is any guide, shoppers have taken the message about recycling soft plastics firmly to heart.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/225067/original/file-20180627-112641-dy4i2g.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/225067/original/file-20180627-112641-dy4i2g.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/225067/original/file-20180627-112641-dy4i2g.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/225067/original/file-20180627-112641-dy4i2g.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/225067/original/file-20180627-112641-dy4i2g.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/225067/original/file-20180627-112641-dy4i2g.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/225067/original/file-20180627-112641-dy4i2g.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/225067/original/file-20180627-112641-dy4i2g.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Soft plastic bins overflowing at Coles, Murwillumbah, June 2018.</span>
<span class="attribution"><span class="source">Louise Moana Kolff</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>Few people would argue against the reduction of plastic waste. Most people are ready and willing to change, and the agencies that are designing campaigns on the issue would do well to remember this. Positive encouragement and advice are preferable to fear, shame or shock tactics.</p><img src="https://counter.theconversation.com/content/98944/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Louise Moana Kolff does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Plastic bags will soon be gone from major supermarkets and many other shops too. Campaigns to reduce plastic even more should focus on positive advice, rather than shaming shoppers for their plastic use.Louise Moana Kolff, Lecturer, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.