tag:theconversation.com,2011:/es/topics/supermarkets-721/articlesSupermarkets – The Conversation2024-03-03T22:28:29Ztag:theconversation.com,2011:article/2236482024-03-03T22:28:29Z2024-03-03T22:28:29ZWhy is gluten-free bread so expensive? A food supply chain expert explains<figure><img src="https://images.theconversation.com/files/576432/original/file-20240219-26-3ck4ru.jpg?ixlib=rb-1.1.0&rect=40%2C10%2C6599%2C4436&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/hands-girl-holding-sliced-white-bread-1891015522">CGN089/Shutterstock</a></span></figcaption></figure><p>Before the cost of living hit Australian families hard, a group of consumers were already paying top dollar for their staples. Whether it be gluten free, dairy free or lactose free, people with special dietary requirements are used to spending more at the supermarket checkout. </p>
<p>A 2016 study from the University of Wollongong found that Australians were <a href="https://onlinelibrary.wiley.com/doi/10.1111/1747-0080.12171">paying up to 17% more for a gluten-free diet</a>.</p>
<p>Current examples are easy to find. A <a href="https://www.coles.com.au/product/coles-white-bread-650g-4901345">white sandwich loaf at Coles</a> costs A$2.40 (or A$0.37 per 100g), whereas <a href="https://www.coles.com.au/product/coles-i'm-free-from-white-loaf-500g-3216673">the cheapest gluten-free option</a> costs $5.70 (or $1.14 per 100g). That’s over three times as much. Prices are closer comparing Coles Full Cream Milk at A$1.50 per litre with Coles Lactose Free Lite Milk at A$1.60, the exception that confirms the rule.</p>
<p>So why are allergen-free products more expensive?</p>
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Read more:
<a href="https://theconversation.com/why-does-everyone-seem-to-have-food-intolerances-these-days-183224">Why does everyone seem to have food intolerances these days?</a>
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<h2>Is it the ingredients?</h2>
<p>If manufacturers pay more for ingredients, this is usually reflected in the price of the final product. Regular and gluten-free bread share many common ingredients, but there is a substantial change where wheat flour is replaced by gluten-free flour. This ingredient may cost manufacturers around two times as much given the uniqueness of gluten-free grains, seeds, and nuts. These special ingredients are not as abundant or easy to process as wheat, and are also a bit more difficult to buy in very large scale.</p>
<p>For a simple reference, compare <a href="https://www.coles.com.au/product/coles-white-plain-flour-1kg-5881232">regular</a> and <a href="https://www.coles.com.au/product/coles-i'm-free-from-plain-flour-gluten-free-500g-2478197">gluten-free flour</a> at Coles.</p>
<p>Gluten, <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/jgh.13703">a complex mixture of hundreds of related but distinct proteins</a>, has unique properties. It is a binding agent that improves texture in recipes. Gluten-free bread therefore needs extra help to, literally, hold it together. Additional items such as thickeners, tapioca and maize starches are added to gluten-free recipes to improve viscosity and keep baked items in shape. That means a longer ingredient list and a slightly more complex manufacturing process.</p>
<p>So, from an ingredient perspective, gluten-free bread costs more than regular bread. This applies for other allergen-free products as well. But with so many common ingredients, it is reasonable to say that this is not the main explanation.</p>
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<img alt="Row of price tags on a supermarket shelf" src="https://images.theconversation.com/files/576442/original/file-20240219-28-2svnqh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/576442/original/file-20240219-28-2svnqh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/576442/original/file-20240219-28-2svnqh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/576442/original/file-20240219-28-2svnqh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/576442/original/file-20240219-28-2svnqh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/576442/original/file-20240219-28-2svnqh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/576442/original/file-20240219-28-2svnqh.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">
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<span class="caption">People with dietary restrictions face higher costs for everyday staples.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/city-melbourne-vicaustraliamay-11th-2019-price-1427246867">doublelee/Shutterstock</a></span>
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<h2>Is it manufacturing and transporting?</h2>
<p>A substantial part of price differences between regular and allergen-free foods comes from <a href="https://www.investopedia.com/terms/e/economiesofscale.asp">economies of scale</a>. Regular products are manufactured in very large quantities, while allergen-free products involve much smaller volumes. </p>
<p>Bulk buying from large suppliers gets you bigger discounts. The more machines in a factory, the cheaper it is to run them. Larger outputs coming from the same place mean smaller costs for each individual product. Given that you have fixed costs to pay anyway, size is king. </p>
<p>You pay the same amount for a grain mill regardless of whether you grind one kilo or one tonne of grains a day. Sure, you spend more on electricity or gas, but those are <a href="https://corporatefinanceinstitute.com/resources/accounting/fixed-and-variable-costs/">variable costs</a>.</p>
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Read more:
<a href="https://theconversation.com/were-in-a-food-price-crisis-what-is-the-government-doing-to-ease-the-pressure-222368">We're in a food price crisis. What is the government doing to ease the pressure?</a>
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<p>Then, there is the need for rigorous quality control. The United Nations Food and Agriculture Organization has a detailed <a href="https://www.fao.org/fao-who-codexalimentarius/sh-proxy/en/?lnk=1&url=https%253A%252F%252Fworkspace.fao.org%252Fsites%252Fcodex%252FStandards%252FCXC%2B80-2020%252FCXC_080e.pdf">code of practice on food allergen management for food business operators</a>, covering harvesting, handling, storage, transportation, packaging, and more. The <a href="https://www.foodstandards.gov.au/food-standards-code">Australia New Zealand Food Standards Code</a> also sets specific standards. </p>
<p>Deep cleaning machines, thoroughly checking that standards are met, and scrapping whole batches when they are not makes manufacturing allergen-free products more complex and expensive. The <a href="https://www.health.wa.gov.au/-/media/Files/Corporate/general-documents/food/PDF/DOHComplianceandEnforcementPolicyVersion3.pdf">implications for non-compliance</a> vary in severity, from a simple recall to a costly infringement notice, plus <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10574315/">reputational damage to consumer trust</a>.</p>
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<a href="https://images.theconversation.com/files/576916/original/file-20240221-16-jyuewt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A batch of bread in a manufacturing facility" src="https://images.theconversation.com/files/576916/original/file-20240221-16-jyuewt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/576916/original/file-20240221-16-jyuewt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=340&fit=crop&dpr=1 600w, https://images.theconversation.com/files/576916/original/file-20240221-16-jyuewt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=340&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/576916/original/file-20240221-16-jyuewt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=340&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/576916/original/file-20240221-16-jyuewt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=427&fit=crop&dpr=1 754w, https://images.theconversation.com/files/576916/original/file-20240221-16-jyuewt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=427&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/576916/original/file-20240221-16-jyuewt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=427&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">Producing allergen-free products requires rigorous quality control.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/johannesburg-south-africa-9-march-2015-1136105552">Rich T Photo/Shutterstock</a></span>
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<p>It is hard to exactly measure the impact of economies of scale and quality costs on the price of allergen-free products. Each manufacturer will have its own challenges and solutions. But it is reasonable to say a considerable chunk of the difference we see when comparing gluten-free bread with its regular counterpart comes from these factors.</p>
<p>Transportation costs follow a similar rule. If it is easier and quicker to fill your trucks with regular products, while allergen-free products have a hard time making a full load, there are disadvantages in the latter.</p>
<h2>Is it the marketing strategy?</h2>
<p>The final consideration on allergen-free food prices has to do with competition and willingness to pay. </p>
<p>A quick search on Coles’ website shows 276 results for “bread” once you remove the 42 items that are gluten-free. That means that there are many more brands and products competing for bread consumers than for gluten-free bread consumers.
That’s over six to one! This means customers with dietary restrictions are at a disadvantage as they are beholden to the limited options on offer. As noted by the Australian Competition & Consumer Commission, “<a href="https://www.accc.gov.au/business/competition-and-exemptions/competition-and-anti-competitive-behaviour">competition leads to lower prices and more choice for consumers</a>”. </p>
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<img alt="Supermarket aisle" src="https://images.theconversation.com/files/576445/original/file-20240219-18-pwv50z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/576445/original/file-20240219-18-pwv50z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/576445/original/file-20240219-18-pwv50z.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/576445/original/file-20240219-18-pwv50z.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/576445/original/file-20240219-18-pwv50z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/576445/original/file-20240219-18-pwv50z.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/576445/original/file-20240219-18-pwv50z.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">Fewer allergen-free options means less competition and higher prices.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/perth-australia-june-11-2018-interior-1193187478">TY Lim/Shutterstock</a></span>
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<p>Also, fewer allergen-free products make it to the “own brand” list. Australians are <a href="https://www.news.com.au/finance/money/costs/coles-woolworths-ownbrand-products-booming-on-back-of-costofliving-crisis/news-story/d0be8b8d6e98c0a6477959cd83da17ad">relying more on these when facing the cost-of-living crisis</a>.</p>
<p>There is also the <a href="https://online.hbs.edu/blog/post/willingness-to-pay">willingness to pay</a>, where consumers pay more for products deemed as having higher value. <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/obr.13525">Research</a> shows that on average consumers are willing to pay 30% more for food products that they perceive to be healthier.</p>
<p>Manufacturers and retailers more often than not will capitalise on that, increasing their profit margins for allergen-free products.</p>
<h2>4 tips for saving money if you have allergies</h2>
<p>People with dietary requirements looking to ease the cost of their weekly grocery shop should use the same strategies as every savvy consumer: </p>
<ul>
<li>research prices</li>
<li>buy larger quantities where possible</li>
<li>keep a keen eye on price reduction and items on sale</li>
<li>consider replacing products tagged “allergen-free” with alternatives from other categories, such as going for rice instead of gluten-free pasta in a dish. </li>
</ul>
<p>In the long run, if more customers choose allergen-free products it could lead to more volume and competition, bringing prices down. </p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/trying-to-spend-less-on-food-following-the-dietary-guidelines-might-save-you-160-a-fortnight-216749">Trying to spend less on food? Following the dietary guidelines might save you $160 a fortnight</a>
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<img src="https://counter.theconversation.com/content/223648/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Flavio Macau is affiliated with the Australasian Supply Chain Institute (ASCI).</span></em></p>Ingredients, manufacturing, transportation and marketing factor into higher prices for allergen-free products.Flavio Macau, Associate Dean - School of Business and Law, Edith Cowan UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2244712024-02-28T12:34:27Z2024-02-28T12:34:27ZWhat’s next for $25B supermarket supermerger after FTC sues to block it, saying it could raise prices<figure><img src="https://images.theconversation.com/files/578386/original/file-20240227-26-jz6nu4.jpg?ixlib=rb-1.1.0&rect=970%2C550%2C2646%2C1491&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Shoppers select items at a large Kroger supermarket in Atlanta in 2022.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/shoppers-are-seen-in-a-kroger-supermarket-on-october-14-in-news-photo/1244106504?adppopup=true">Elijah Nouvelage/AFP via Getty Images</a></span></figcaption></figure><p><em>The Federal Trade Commission announced on on Feb. 26, 2024, that it’s suing to prevent <a href="https://www.ftc.gov/news-events/news/press-releases/2024/02/ftc-challenges-krogers-acquisition-albertsons">Kroger’s attempt to acquire Albertsons</a>. The US$25 billion deal, first announced in 2022, would combine Cincinnati-based Kroger, already the <a href="https://www.foodindustry.com/articles/top-10-grocers-in-the-united-states-2019/#gsc.tab=0">largest traditional U.S. supermarket chain</a>, with Boise, Idaho-based Albertsons, which is currently the fourth-biggest. The Conversation asked <a href="https://scholar.google.com/citations?user=wI3ku0oAAAAJ&hl=en&oi=ao">Christine P. Bartholomew</a>, a professor at the University at Buffalo School of Law who researches consumer protection, to explain what’s at stake and why the government opposes this merger.</em></p>
<h2>Which supermarkets belong to the two companies?</h2>
<p>The proposed merger involves more than <a href="https://thehill.com/business/4489557-ftc-state-ags-sue-to-block-kroger-albertsons-merger/">5,000 stores in 48 states</a>. Millions of their customers, whose shopping routines could be affected if the deal goes through, may not recognize these brand names because they shop at supermarket chains large and small that the companies have acquired in recent decades through previous mergers. </p>
<p><a href="https://www.thekrogerco.com/about-kroger/history/">Kroger has 28 subsidiaries with nearly 2,800 supermarkets</a>, including Harris Teeter, Dillon’s, Smith’s, King Soopers, Fry’s, City Market, Owen’s, JayC, Pay Less, Baker’s Gerbes, Pick‘n Save, Metro Market, Mariano’s Fresh Market, QFC, Ralphs and Fred Meyer.</p>
<p><a href="https://www.albertsonscompanies.com/about-aci/overview/default.aspx">Albertsons owns and operates more than 2,200 supermarkets</a> through its many brands. They include Safeway, Vons, Jewel-Osco, Shaw’s, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen, Carrs, Kings Food Market and Balducci’s. </p>
<h2>Why does Kroger want to acquire Albertsons?</h2>
<p>The <a href="https://www.nbcchicago.com/news/business/us-sues-to-halt-merger-of-kroger-and-albertsons-parent-companies-of-marianos-and-jewel-osco/3366312/">companies argue that they need to join forces</a> to compete against even bigger online and big box retailers. Over the last two years, Walmart and Costco have <a href="https://www.grocerydive.com/news/kroger-albertsons-merger-2023-pardon-the-disruption/696308/">gained market share</a> while other chains have held steady or lost ground. Discount and alternative format stores, like Aldi and Costco, are also placing competitive pressure on these stores, along with stiff competition from dollar stores, one of the <a href="https://www.npr.org/2022/10/14/1129014897/kroger-and-albertsons-plan-merger-to-combine-2-largest-supermarket-chains">fastest-growing segments of U.S. retail</a>.</p>
<p>If the merger goes through over the federal government’s opposition, the new company would cement its position, ensuring it has the largest market share for grocery purchases after Walmart.</p>
<p>By getting even bigger, Kroger and Albertsons contend, these already huge supermarket chains <a href="https://abcnews.go.com/US/wireStory/us-government-kroger-albertsons-merger-bad-grocery-shoppers-107593123">would gain more bargaining power</a>, enabling them to charge lower prices, earn higher profits and spur more innovation. While that might sound like a good thing, they have provided few details on how these gains would be realized.</p>
<h2>What could go wrong?</h2>
<p>The government is getting involved out of concern that this merger could deny many shoppers the benefits of competition.</p>
<p>If the deal goes through, Walmart plus the combined Kroger and Albertsons company would <a href="https://ilsr.org/statement-kroger-albertsons-merger/">control 70% of the grocery market</a> in more than 160 cities. Its dominance could empower the enlarged company to drive up prices at a time when <a href="https://www.washingtonpost.com/business/2024/02/02/grocery-price-inflation-biden/">consumers are already feeling the pinch</a>.</p>
<p>History has taught me and other scholars who study grocery store mergers to be <a href="https://www.promarket.org/2023/11/22/why-the-kroger-albertsons-merger-is-a-mess-for-consumers/">skeptical</a> about claims that adding more stores into ever-larger companies will lower prices and enhance competition.</p>
<p>When the <a href="https://www.ftc.gov/sites/default/files/documents/reports/do-retail-mergers-affect-competition%C2%A0-evidence-grocery-retailing/wp313.pdf">FTC assessed the impact of 14 mergers in the supermarket industry</a>, it found that though companies in virtually every merger promised lower prices, those promises only came true in less than half the deals. </p>
<p>The proposed merger could possibly harm workers too, the government contends. The FTC warns that the <a href="https://www.ftc.gov/news-events/news/press-releases/2024/02/ftc-challenges-krogers-acquisition-albertsons">merger could restrain wages, reduce benefits and weaken worker protections</a> for the 720,000 employees working for supermarkets owned by the two companies. </p>
<p><a href="https://www.axios.com/2024/02/27/price-food-us-inflation-data-groceries">Grocery expenses gobble up almost 11.3%</a> of consumers’ disposable income. Even small price increases for eggs, milk and other groceries that most Americans regularly purchase can strain household budgets.</p>
<p>The FTC’s warning echoes the sentiment of many members of the United Food and Commercial Workers International Union, which has <a href="https://www.reuters.com/markets/deals/unions-praise-ftc-lawsuit-blocking-kroger-albertsons-merger-2024-02-26/">opposed the deal</a> since it was announced.</p>
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<a href="https://images.theconversation.com/files/578381/original/file-20240227-16-8iokvr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A group of people protest while holding red and white anti-merger pro-labor signs aloft." src="https://images.theconversation.com/files/578381/original/file-20240227-16-8iokvr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/578381/original/file-20240227-16-8iokvr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=377&fit=crop&dpr=1 600w, https://images.theconversation.com/files/578381/original/file-20240227-16-8iokvr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=377&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/578381/original/file-20240227-16-8iokvr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=377&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/578381/original/file-20240227-16-8iokvr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=473&fit=crop&dpr=1 754w, https://images.theconversation.com/files/578381/original/file-20240227-16-8iokvr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=473&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/578381/original/file-20240227-16-8iokvr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=473&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">Unionized grocery store workers rally to oppose the proposed Kroger-Albertsons merger outside a Ralph’s supermarket in Los Angeles on April 13, 2023.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/unionized-grocery-store-workers-rally-to-oppose-the-news-photo/1251799980?adppopup=true">Frederic J. Brown/AFP via Getty Images</a></span>
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<h2>How will the courts decide?</h2>
<p>The central question in the case will be whether the proposed merger violates the <a href="https://www.law.cornell.edu/uscode/text/15/18">Clayton Act</a>. This <a href="https://www.investopedia.com/terms/c/clayton-antitrust-act.asp">1914 law bars mergers</a> that “may be substantially to lessen competition, or to tend to create a monopoly.”</p>
<p>Proof that mergers would result in higher prices isn’t necessary. Rather, there need only be an appreciable danger that the level of competition will decline. <a href="https://nz.finance.yahoo.com/news/us-ftc-announce-suing-block-164053955.html">The initial proceeding is administrative</a>, meaning it would be heard by an in-house administrative judge.</p>
<p>This judge will consider the impact of the merger on competition among supermarket chains, looking at variables such as whether it would increase market concentration and prices while undermining quality and innovation. </p>
<p>If the FTC and state attorneys general succeed in making that case, then Kroger and Albertsons have two choices.</p>
<p>They could argue that any such harm is offset by aspects of the merger that might boost competition in other ways and prove their claims that the merger would <a href="https://www.albertsonscompanies.com/newsroom/press-releases/news-details/2022/Kroger-and-Albertsons-Companies-Announce-Definitive-Merger-Agreement/default.aspx">lower prices for shoppers</a>.</p>
<p>Alternatively, the companies can try to refute any evidence from the FTC supporting its claims that the merger would restrict competition among supermarket companies.</p>
<p>To make their case, Kroger-Albertsons would likely point to its <a href="https://ir.kroger.com/news/news-details/2023/Kroger-and-Albertsons-Companies-Announce-Comprehensive-Divestiture-Plan-with-CS-Wholesale-Grocers-LLC-in-Connection-with-Proposed-Merger/default.aspx">plan to sell off 413 of the supermarkets they currently own</a> across the United States to C&S Wholesale Grocers. The plan, announced in 2023, also calls for the sale of some distribution centers, private labels and other assets to help competition in places like California, Washington and Oregon.</p>
<p>These steps raise key questions that are hard and complicated to answer. For example, which markets could be harmed by a merger? Would the proposed plan to sell off some assets protect consumers who shop in those areas? </p>
<p>The administrative judge will also need to assess the potential impact on workers. </p>
<p>Afterward, the case could go to a U.S. District Court for further review, meaning that resolving this dispute could take several more years.</p>
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<a href="https://images.theconversation.com/files/578380/original/file-20240227-22-ko67ie.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Man in suit and tie stands at a podium in front of a map with photos of supermarkets on it." src="https://images.theconversation.com/files/578380/original/file-20240227-22-ko67ie.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/578380/original/file-20240227-22-ko67ie.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/578380/original/file-20240227-22-ko67ie.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/578380/original/file-20240227-22-ko67ie.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/578380/original/file-20240227-22-ko67ie.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/578380/original/file-20240227-22-ko67ie.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/578380/original/file-20240227-22-ko67ie.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>
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<span class="caption">Colorado Attorney General Phil Weiser announces the filing of a lawsuit to block the merger on Feb. 14, 2024.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/Grocery%20Store%20Merger%20Lawsuit/d1058b41b38140f4bf4d02a088125fca?Query=kroger%27s&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=2047&currentItemNo=4">AP Photo/David Zalubowski</a></span>
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<h2>What other litigation is going on?</h2>
<p>The <a href="https://www.cbsnews.com/news/kroger-albertsons-ftc-sues-to-block-merger/">state attorneys general</a> representing consumers in eight states – Arizona, California, Illinois, Maryland, Nevada, New Mexico, Oregon and Wyoming – joined this federal lawsuit. So has the District of Columbia’s attorney general.</p>
<p>And the <a href="https://www.npr.org/2024/01/15/1224401179/kroger-albertsons-merger-grocery-lawsuit-washington">Washington</a> and <a href="https://coag.gov/2024/colorado-attorney-general-phil-weiser-files-lawsuit-to-block-proposed-kroger-albertsons-merger/">Colorado</a> attorneys general have also each filed suit in their own states to block the merger. Those cases are pending in state courts, and both will need to be litigated regardless of what happens with the FTC’s action.</p>
<p>The <a href="https://coag.gov/app/uploads/2024/02/2024-02-14-Complaint-Public.pdf">Colorado complaint may add additional antitrust</a> concerns for the Kroger and Albertsons deal because it includes allegations that the companies have colluded to suppress workers’ benefits and wages. If proved, such conduct violates antitrust laws.</p>
<p>Even if the FTC is not successful, the enlarged supermarket company could face lingering antitrust scrutiny because it would still have to address Washington’s and Colorado’s merger challenges. And even if those challenges fail, the companies will have to respond to the Colorado attorney general’s allegations of collusion.</p>
<p><em>This article has been updated to correct a statement about market share for grocery stores in more than 160 cities. That figure includes Walmart, as well as the proposed Kroger-Albertsons company.</em></p><img src="https://counter.theconversation.com/content/224471/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Christine P. Bartholomew does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Turning two big supermarket companies into one even larger one could harm consumers and workers, the government says.Christine P. Bartholomew, Professor of Law, University at BuffaloLicensed as Creative Commons – attribution, no derivatives.tag: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>
<span class="attribution"><span class="source">Woolworths</span></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>
<blockquote>
<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>
</blockquote>
<p>Meanwhile, Coles’ chief Leah Weckert said:</p>
<blockquote>
<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>
</blockquote>
<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>
<blockquote>
<p>so that is power, that’s market power when you can simply reject something for no great reason</p>
</blockquote>
<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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<span class="attribution"><span class="source">Shutterstock</span></span>
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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>
<hr>
<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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<hr>
<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>
<hr>
<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>
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<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>
<hr>
<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>
<hr>
<p>
<em>
<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>
</strong>
</em>
</p>
<hr>
<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>
<hr>
<p>
<em>
<strong>
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>
</strong>
</em>
</p>
<hr>
<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>
</strong>
</em>
</p>
<hr>
<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/2223682024-02-06T19:08:26Z2024-02-06T19:08:26ZWe’re in a food price crisis. What is the government doing to ease the pressure?<figure><img src="https://images.theconversation.com/files/573645/original/file-20240206-23-aernio.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C6000%2C3988&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/asian-local-woman-buy-vegetables-fruits-1280584279">PR Image Factory/Shutterstock</a></span></figcaption></figure><p>An affordable daily diet has edged too far away for many Australians. Food prices have risen sharply since <a href="https://www.abs.gov.au/articles/australian-dietary-guidelines-price-indexes">2021</a>, fuelling cost of living pressures and food insecurity. Some <a href="https://reports.foodbank.org.au/foodbank-hunger-report-2023/">3.7 million Australian households</a> experienced food insecurity in 2023 – 10% more than in 2022.</p>
<p>Food prices have always been a challenge for many Australians. This is especially true for people on low incomes, refugees, people living in rural areas, single mothers, and people with disability. A basic healthy diet can cost city-dwelling families who are doing it toughest roughly <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7675258/">one-third</a> of their income.</p>
<p>So what is the Australian government doing to ease the cost of a supermarket shop? Let’s take a look.</p>
<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>
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</em>
</p>
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<h2>First, how much have food prices increased, and why?</h2>
<p>Food prices peaked in December 2022, with an average shopping basket costing <a href="https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/latest-release">9.2% more</a> than in 2021. Although food prices have eased since that peak, they remain significantly <a href="https://www.abs.gov.au/articles/australian-dietary-guidelines-price-indexes">higher</a> now compared to before the pandemic. </p>
<p>Almost <a href="https://www.abc.net.au/news/2022-07-10/food-price-data-pinpoints-most-expensive-items/101218998">all food</a> categories have been hit, but many healthy foods appear to have increased in price at almost <a href="https://www.mdpi.com/1660-4601/20/4/3146">double the rate</a> of discretionary (unhealthy) foods.</p>
<figure class="align-center ">
<img alt="A woman looks at her supermarket receipt." src="https://images.theconversation.com/files/573646/original/file-20240206-21-ygh93u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/573646/original/file-20240206-21-ygh93u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=415&fit=crop&dpr=1 600w, https://images.theconversation.com/files/573646/original/file-20240206-21-ygh93u.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=415&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/573646/original/file-20240206-21-ygh93u.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=415&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/573646/original/file-20240206-21-ygh93u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=521&fit=crop&dpr=1 754w, https://images.theconversation.com/files/573646/original/file-20240206-21-ygh93u.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=521&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/573646/original/file-20240206-21-ygh93u.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=521&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Food prices are much higher now than pre-pandemic.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/senior-woman-supermarket-checks-her-grocery-2268463181">Lucigerma/Shutterstock</a></span>
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<p>The COVID pandemic, climate events such as floods and bushfires, and international conflicts have all contributed, to varying degrees. These events have placed undue pressure on food supply chains through food shortages, increased fuel, energy and transport costs and a shortage of workers from farm to fork.</p>
<p>Big supermarkets have also been <a href="https://www.abc.net.au/news/2023-08-22/food-price-groceries-rise-dairy-frozen-tinned-coles-woolworths/102755276">scrutinised</a> recently. In Australia, supermarkets can set prices, with little transparency. This is against a backdrop of one of the most <a href="https://onlinelibrary.wiley.com/doi/10.1111/obr.12635">powerful</a> and concentrated grocery sectors in the <a href="https://www2.deloitte.com/content/dam/Deloitte/at/Documents/presse/at-deloitte-global-powers-of-retailing-2023.pdf">world</a>, severely limiting competition.</p>
<p>Claims of supermarket price gouging have inspired public outrage, particularly given the two supermarket giants each pocketed more than <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">A$1 billion in profits</a> in 2022-2023.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/are-you-living-in-a-food-desert-these-maps-suggest-it-can-make-a-big-difference-to-your-health-196477">Are you living in a food desert? These maps suggest it can make a big difference to your health</a>
</strong>
</em>
</p>
<hr>
<h2>So what is the government doing to ease the pressure?</h2>
<p>The government’s Standing Committee on Agriculture undertook an <a href="https://www.aph.gov.au/foodsecurity">inquiry into food security</a> in Australia in 2023, and came up with <a href="https://apo.org.au/sites/default/files/resource-files/2023-12/apo-nid325229.pdf">35 recommendations</a>. While many of these recommendations may indirectly influence food prices, only one explicitly addressed food prices: to provide subsidies for remote community stores so fresh food can be sold at an affordable price. These recommendations are yet to be implemented.</p>
<p>At the end of 2023, the <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Supermarket_Prices/SupermarketPrices">Senate Select Committee on Supermarket Prices</a> was established to “inquire into and report on the price setting practices and market power of major supermarkets”. Submissions to the inquiry recently closed, with the final report due in May.</p>
<p>In early 2024, the government announced an independent review of the <a href="https://www.pm.gov.au/media/appointment-dr-craig-emerson-independent-reviewer-food-and-grocery-code-conduct#:%7E:text=The%20Albanese%20Government%20has%20appointed,Competition%20and%20Consumer%20Act%202010.">Food and Grocery Code of Conduct</a> to ensure the grocery retailers and wholesalers are dealing fairly with suppliers. Although not specifically focused on the shelf price of food, a fairer deal between retailers and suppliers may flow to lower prices for consumers.</p>
<figure class="align-center ">
<img alt="A young man stands in a supermarket holding a phone." src="https://images.theconversation.com/files/573648/original/file-20240206-21-6wsuub.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/573648/original/file-20240206-21-6wsuub.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/573648/original/file-20240206-21-6wsuub.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/573648/original/file-20240206-21-6wsuub.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/573648/original/file-20240206-21-6wsuub.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/573648/original/file-20240206-21-6wsuub.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/573648/original/file-20240206-21-6wsuub.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">A number of inquiries are happening into supermarket prices in Australia.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/handsome-man-shopping-supermarket-2314430167">Hryshchyshen Serhii/Shutterstock</a></span>
</figcaption>
</figure>
<p>Most recently, the Albanese government formally issued a directive to the Australian Competition and Consumer Commission (ACCC) to carry out a 12-month investigation into <a href="https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/media-releases/government-launch-accc-inquiry-supermarket-prices">supermarket prices</a>. This will have more teeth than other inquiries, allowing the ACCC to use legal powers to gather information, including from the supermarkets themselves. </p>
<p>If wrongdoing is uncovered, the ACCC has the power to take the supermarkets to court. The pressure from the inquiry may also lead to supermarkets voluntarily lowering food prices, in a similar way to <a href="https://www.accc.gov.au/media-release/supermarket-agreement-opens-way-for-more-competition">previous inquiries</a>.</p>
<hr>
<p>
<em>
<strong>
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>
</strong>
</em>
</p>
<hr>
<h2>What are other countries doing?</h2>
<p>In <a href="https://neoskosmos.com/en/2024/01/18/news/australia/australian-supermarkets-face-scrutiny-over-food-costs-greece-counterparts-to-lower-prices/">Greece</a>, the government has temporarily forced supermarkets to reduce prices on basic products. For example, the price of at least one type of bread would be lowered and advertised to shoppers at this lower rate. The Greek government has also provided low-income households with a <a href="https://www.reuters.com/world/europe/greece-seeks-price-transparency-supermarkets-help-families-2023-09-20/">monthly allowance</a> to support grocery costs, among other measures.</p>
<p>The <a href="https://www.reuters.com/markets/europe/how-france-secured-fall-food-prices-2023-06-12/">French government</a> has worked with the food sector to secure a commitment from 75 companies to cut their prices. It has also promised regular price checks at supermarkets to ensure prices fall, with financial penalties if they don’t.</p>
<p>In <a href="https://www.barrons.com/news/spain-extends-some-anti-inflation-measures-into-2024-bcc6e520">Spain</a>, the value added tax on basic foods, such as fruits, vegetables, pasta and cooking oils, has been eliminated or lowered. Government tax revenue will be reduced for these items, but retained for other non-basic foods (similar to the <a href="https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/your-industry/food/gst-and-food/gst-free-food">GST</a> in Australia).</p>
<h2>What next for Australia?</h2>
<p>The multi-year food price crisis has revealed the vulnerability of our food system. We need to recover from where we are, but we must do so in a way that ensures a more resilient food system with stable food prices over time.</p>
<p>While it’s too early to know what will come of the various food price inquiries, the government is and should continue to provide general cost-of-living support. The recent <a href="https://theconversation.com/middle-australia-wins-from-the-governments-tax-plan-but-the-budget-is-the-biggest-loser-222383">revised Stage 3 tax cuts</a> are an example of increasing the flow of money to those who need it most, easing pressure at the supermarket checkout. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/trying-to-spend-less-on-food-following-the-dietary-guidelines-might-save-you-160-a-fortnight-216749">Trying to spend less on food? Following the dietary guidelines might save you $160 a fortnight</a>
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</em>
</p>
<hr>
<p>Further support for vulnerable households could be implemented by expanding existing <a href="https://www.raisetherate.org.au/">social safety nets</a> through increasing income support payments.</p>
<p>The fate of food prices in Australia is, at least for now, uncertain. But one thing is for sure. Unless the government steps up to ease the pressure, too many Australians will keep struggling to put food on the table.</p><img src="https://counter.theconversation.com/content/222368/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Kathryn Backholer receives funding from the Australian Research Council, the National Heart Foundation, the United Nations Children's Fund, the World Health Organization, the National Health and medical Research Council, The Ian Potter Foundation, QUIT Victoria, and The Responsible Gambling Foundation. </span></em></p><p class="fine-print"><em><span>Christina Zorbas receives funding from the Victorian Health Promotion Foundation (VicHealth) and the International Food Policy Research Institute (IFPRI).</span></em></p>The COVID pandemic, climate events and international conflicts have all contributed, while supermarket giants have been accused of price gouging.Kathryn Backholer, Co-Director, Global Centre for Preventive Health and Nutrition, Deakin UniversityChristina Zorbas, Research Fellow, Deakin UniversityLicensed 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/2183732023-12-27T09:11:25Z2023-12-27T09:11:25ZWhat’s the truth behind the ‘shoplifting epidemic’? Six key questions answered<figure><img src="https://images.theconversation.com/files/564897/original/file-20231211-23-ybkbik.jpg?ixlib=rb-1.1.0&rect=82%2C52%2C4928%2C3351&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Is it really true that shoplifting is out of control? </span> <span class="attribution"><span class="source">Shutterstock/Lightspring</span></span></figcaption></figure><p>According to media reports, in 2023 the UK experienced an unprecedented <a href="https://www.bbc.co.uk/news/uk-england-devon-64057660">wave</a> of <a href="https://www.bbc.co.uk/news/articles/ce5rkgpyy2ro">shoplifting</a>. The theory goes that the <a href="https://www.bbc.co.uk/news/business-66049150">cost of living crisis</a> and poor police responses are driving a crime wave.</p>
<p>Is that really true? Here, we assess six of the most popular assertions made about shoplifting in 2023. Are they myth or reality?</p>
<h2>1. Is there really a shoplifting epidemic?</h2>
<p>Shoplifting has increased – but much of this reflects the fact that it declined <a href="https://crimesciencejournal.biomedcentral.com/counter/pdf/10.1186/s40163-021-00142-z.pdf">60% in the pandemic</a>. So reports of year-on-year changes are misleading. </p>
<p>Many crime types remain below pre-pandemic levels because we now work from home more than we used to. But by 2023 we were out shopping as much as before. That provided camouflage for shoplifting, so it returned to, and now exceeds, <a href="https://eprints.whiterose.ac.uk/200708/1/COVIDCrimeStatsBulletin_18_Crime_Trends_to_Apr23.pdf">pre-pandemic levels</a>.</p>
<p>In the first six months of 2023, shoplifting reported to police averaged <a href="https://www.crimrxiv.com/pub/bqkby11t/release/1">7% above</a> the pre-pandemic expected level. It then increased to 20% above the expected level in the summer months. While most shoplifting is not reported to police, the available data suggests that the increase is not as dramatic as some accounts suggest. </p>
<p><strong>Myth or reality?</strong> Half-myth. To some extent it remains to be determined with better data – but there is a problem. </p>
<h2>2. Has the cost-of-living crisis driven people to theft?</h2>
<p>It has become common to blame the <a href="https://theweek.com/news/crime/961034/cost-of-living-is-shoplifting-on-the-rise">cost-of-living</a> crisis for rises in shoplifting. However, several facts do not fit with this theory. Shoplifting by dependent drug users, for example, is not due to the cost-of-living crisis. </p>
<p>Likewise, when department stores like <a href="https://www.bbc.co.uk/news/business-66784250">John Lewis</a> decry theft of their high-end products, this is not a cost-of-living issue – it implies organised gangs are operating for profit. That explanation, put forward by the retailers themselves, contradicts the idea that increased shoplifting is due to cost-of-living issues. </p>
<p><strong>Myth or reality?</strong> Myth and half-truth. </p>
<h2>3. Are organised gangs to blame?</h2>
<p>Another version of events is more plausible – that <a href="https://www.bbc.co.uk/news/uk-england-berkshire-66112002">organised</a> <a href="https://theconversation.com/shop-theft-has-been-building-for-years-heres-how-to-tackle-retail-crime-and-keep-workers-safe-213624">gangs</a> are the <a href="https://www.theguardian.com/uk-news/2023/sep/15/its-organised-looting-uk-in-grip-of-a-shoplifting-epidemic-say-store-owners">problem</a>.</p>
<p>The pandemic boosted <a href="https://hostingdata.co.uk/online-shopping-statistics-uk/">online shopping</a> which made made e-fencing of stolen goods easier, which in turn drives shoplifting. E-fencing via online marketplaces is more efficient and less risky than face-to-face in the street or pub. </p>
<p>The result is that some gangs now <a href="https://www.theguardian.com/business/2023/oct/24/organised-gangs-are-shoplifting-to-order-in-uk-john-lewis-boss-says">steal to order</a>. A recent estimate suggests stolen and counterfeit goods account for <a href="https://www.businessinsider.com/selling-buying-shoplifted-stolen-products-online-efencing-facebook-ebay-2023-1?r=US&IR=T">10% of online marketplaces</a>.</p>
<p>Meanwhile, as the retail sector expanded, tempting new products are becoming readily available in large and anonymous self-service shops. Increases in <a href="https://www.bbc.co.uk/news/magazine-25762466">mini-supermarkets</a> means valuable items are closer to the door with fewer staff between the thief and the exit.</p>
<p>In the long term, then, it is change in the retail sector that inadvertently encourages shoplifting. We need more evidence, but organised crime offers a plausible explanation for increased post-pandemic shoplifting. </p>
<p><strong>Myth or reality?</strong> Likely reality. </p>
<h2>4. Have the police stopped caring?</h2>
<p>The truth is, police have not been required to attend low-value shoplifting offences for many years. This reflects a long history of <a href="https://www.researchgate.net/publication/247953176_The_Prevention_of_Shop_Theft_An_Approach_Through_Crime_Analysis">problem shops</a> draining police resources with repeat calls without taking responsibility for preventing thefts. </p>
<p>After all, is it fair to expect taxpayers, who pay for police, to foot the bill? Or should retailers take responsibility for shoplifting just as other businesses are increasingly required to take responsibility for carbon emissions? </p>
<p>Like emitting pollution, creating shoplifting opportunities is <a href="https://www.imf.org/en/Publications/fandd/issues/Series/Back-to-Basics/Externalities">effectively optional</a>. Pointing the finger at the police deflects some of the blame but it doesn’t address the real problem. </p>
<p><strong>Myth or reality?</strong> Myth. </p>
<h2>5. Are shops starting to lock up products because of theft increases?</h2>
<p>In 2023 it was claimed that more items such as <a href="https://www.bbc.co.uk/news/business-65764513">cheese, meat and coffee</a> are being locked away or tagged. The truth is that these have been among the most stolen products for <a href="https://www.retailresearch.org/shoplifters.html">many years</a> and tagging has been <a href="https://crimesciencejournal.biomedcentral.com/articles/10.1186/s40163-017-0068-y">around for ages</a>. </p>
<p>It is part of a decades-long process of incremental improvements to retail security. By 2010, <a href="https://test.routledgehandbooks.com/pdf/doi/10.4324/9781843929680-5">research</a> identified 30 measures used to help shops prevent theft, including locking cabinets and adding <a href="https://blogs.bu.edu/llisa/everything-you-need-to-know-about-rfid-tags/">radio frequency tagging</a> to goods, tethering items or using dummy goods such as packaging with nothing in it. </p>
<p>It takes time, but security measures can evolve to be <a href="https://journals.sagepub.com/doi/full/10.1177/1477370820932107">elegant and unobstrusive</a>. Examples already exist – think of wide aisles with clear sight-lines and clever packaging designs that make items difficult to conceal. </p>
<p>When someone meets you and greets you at the door, it’s not just to make shopping pleasant. It shows somebody cares and is watching. The development cycle of security means it sometimes begins as clunky and awkward before becoming something better.</p>
<p>Improved vehicle and household security reduced car crime and burglary by three-quarters since 1992, largely via non-punitive and unobtrusive measures. A suite of invisible car security is now triggered by a key fob, for example, and the best household security is built in as integrated locks on good quality doors.</p>
<p>These measures explain why there are <a href="https://link.springer.com/article/10.1057/s41300-019-00067-5">fewer young people</a> entering the <a href="https://youthendowmentfund.org.uk/wp-content/uploads/2022/02/YEF-Statistics-update-February-2022-FINAL.pdf#:%7E:text=The%20number%20of%20first-time%20entrants%20to%20the%20youth,weapons%20were%20also%20down%20910%2C%20a%2021%25%20fall.">criminal</a> justice system. What’s more, shoppers are generally respectful of measures to reduce crime and promote safety even when they incur a minor inconvenience, such as tag removal at checkout. Overall, the history of security suggests we should be optimistic. </p>
<p><strong>Myth or reality?</strong> Myth. </p>
<h2>6. Are social media provocateurs to blame?</h2>
<p>Social media videos that glorify shoplifting and show <a href="https://www.vice.com/en/article/pkddq8/tiktok-an">how to do it</a> may be part of the picture. Word of mouth took years to spread information that now spreads globally in seconds. </p>
<p>A spate of thefts of Kia’s and Hyundai cars in the US is attributed to a <a href="https://www.economist.com/cities-are-suing-car-manufacturers-over-auto-theft-they-have-a-case">viral TikTok explainer video</a> and was stemmed only when the vehicle manufacturers issued a <a href="https://www.motortrend.com/news/hyundai-fixing-kia-boys-theft-security-vulnerability-free/">software update</a>. Flash mobs have been coordinated on social media, as when hundreds of youths met to <a href="https://www.independent.co.uk/news/uk/crime/oxford-circus-jd-robbery-rampage-tiktok-b2391303.html">rob London’s Oxford Street</a> stores. </p>
<p>Social media platforms are best placed and have the technical know-how to develop measures to stop videos from spreading and to make them less attractive to make and watch. It is not easy but the evidence suggests that <a href="https://popcenter.asu.edu/sites/default/files/tools/pdfs/displacement.pdf">“offenders”</a> will not just circumvent bans on illegal videos. </p>
<p><strong>Myth or reality?</strong> Reality but we need information about its impact.</p>
<h2>What is to be done?</h2>
<p>We need better information about the shoplifting problem. But we know that, with concerted effort, it is possible to <a href="https://popcenter.asu.edu/sites/default/files/shoplifting_2nd_ed.pdf">prevent shoplifting</a>. Crime is always concentrated, so prevention efforts should be focused on the small proportion of shops that disproportionately experience shoplifting and the small number of <a href="https://popcenter.asu.edu/sites/default/files/tools/PDFs/Understanding_Theft_Hot_Products.pdf">hot products</a> that are popular among thieves.</p>
<p>Online eCommerce platforms are best placed to prevent e-fencing, and social media platforms best placed to disrupt provocateurs. The appropriate role for government is to <a href="https://journals.sagepub.com/doi/abs/10.1177/0002716218775045">encourage these private sector agents</a> into action through incentives (such as tax breaks for security) and disincentives (such as threat of regulation and fines).</p><img src="https://counter.theconversation.com/content/218373/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>Is the cost of living really driving regular people to crime? And are those security tags on your steak the result of their misdemeanours?Graham Farrell, Professor of Crime Science, University of LeedsRachel Armitage, Professor of Criminology, University of HuddersfieldLicensed 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/2111262023-09-04T04:21:07Z2023-09-04T04:21:07ZFeeling lonely? Too many of us are. Here’s what our supermarkets can do to help<figure><img src="https://images.theconversation.com/files/544734/original/file-20230825-19-dja0ah.jpg?ixlib=rb-1.1.0&rect=1517%2C0%2C4191%2C2674&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>Even <a href="https://endingloneliness.com.au/wp-content/uploads/2020/11/Ending-Loneliness-Together-in-Australia_Nov20.pdf">before COVID-19</a>, <a href="https://aifs.gov.au/resources/resource-sheets/understanding-and-defining-loneliness-and-social-isolation">social isolation and loneliness</a> were all too common across the community. Living among millions of other people is no comfort for people in cities, where the pace of life is often hectic, and technology and digitisation often limit, rather than help with, social interaction. </p>
<p>The pandemic <a href="https://www.apa.org/pubs/journals/releases/amp-amp0001005.pdf">amplified these problems</a>. In its wake, more of us report we’re lonely.</p>
<p>For some, a weekly shopping trip may be the only chance to interact with others. A supermarket chain in the Netherlands is helping to combat loneliness with so-called “slow” checkouts where chatting is encouraged. Could a similar approach work here?</p>
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Read more:
<a href="https://theconversation.com/why-loneliness-is-both-an-individual-thing-and-a-shared-result-of-the-cities-we-create-198069">Why loneliness is both an individual thing and a shared result of the cities we create</a>
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<h2>We’re getting lonelier</h2>
<p>Around a third of Australians report feeling lonely. <a href="https://lonelinessawarenessweek.com.au/download/512/">One in six</a> experience severe loneliness.</p>
<p>According to the annual Household, Income and Labour Dynamics in Australia (<a href="https://melbourneinstitute.unimelb.edu.au/hilda/publications/hilda-statistical-reports">HILDA</a>) Survey, people <a href="https://www.abc.net.au/news/2023-07-17/social-media-work-hours-cost-of-living-rising-loneliness/102563666">aged 15 to 24</a> report the greatest increase in social isolation over the past 20 years and the highest rates of loneliness. Another <a href="https://www.abc.net.au/news/2023-07-14/middle-aged-men-experiencing-high-level-loneliness/102563492">Australian survey</a> found men aged 35 to 49 had the highest levels of loneliness.</p>
<p>Loneliness and social isolation are <a href="https://www.abc.net.au/news/2023-07-17/social-media-work-hours-cost-of-living-rising-loneliness/102563666">not the same</a>. Social isolation is a matter of how often we have contact with friends, family and others, which can be measured.</p>
<p>Loneliness is more subjective. It describes how we feel about the “quality” of our interactions with others. </p>
<p>Technology is <a href="https://www.psychologytoday.com/au/blog/live-long-and-prosper/202210/technology-use-loneliness-and-isolation#:%7E:text=Technology%20compulsion%20might%20lead%20to,disconnection%20and%20reduce%20well%2Dbeing.">contributing</a> to <a href="https://www.abc.net.au/news/2023-07-17/social-media-work-hours-cost-of-living-rising-loneliness/102563666">high rates of loneliness</a>. Instead of meaningful face-to-face interactions, many of us now rely on social media, phone apps and video calls to socialise. </p>
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Read more:
<a href="https://theconversation.com/how-the-digitalisation-of-everything-is-making-us-more-lonely-90870">How the digitalisation of everything is making us more lonely</a>
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<p>We’re also working longer hours, often at home. And due to the cost of living, many of us are choosing to stay home and save money, rather than eat out or go to “the local”. </p>
<p>It isn’t only in Australia where this is happening. In the UK, around <a href="https://www.lonelinessawarenessweek.org/statistics">3.9 million older people</a> say television is their main company. Half a million may go five or six days a week without seeing anyone.</p>
<p>The World Health Organisation <a href="https://www.who.int/teams/social-determinants-of-health/demographic-change-and-healthy-ageing/social-isolation-and-loneliness">recognises</a> loneliness and social isolation as public health issues and priorities for policymakers. These issues seriously affect people’s mental and physical health as well as longevity. The impacts are comparable with other <a href="https://bmcpublichealth.biomedcentral.com/articles/10.1186/s12889-023-15967-3">risk factors</a> such as smoking, alcohol consumption, obesity and not being physically active.</p>
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Read more:
<a href="https://theconversation.com/loneliness-is-making-us-physically-sick-but-social-prescribing-can-treat-it-podcast-199939">Loneliness is making us physically sick, but social prescribing can treat it – podcast</a>
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<h2>Could slow, ‘chatty’ checkouts be part of the solution?</h2>
<p>For many, a visit to the supermarket may be the only time they interact with others. Sadly, increased use of technology, including self-serve checkouts, and cashiers tasked with speedily processing customers can make it challenging to have a conversation.</p>
<iframe width="100%" height="750" src="https://www.youtube.com/embed/TpALSOvw4LU" title="The FASTEST checkout cashier ever😮 TikTok: rogerlopez7511" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen=""></iframe>
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Read more:
<a href="https://theconversation.com/more-than-milk-and-bread-corner-store-revival-can-rebuild-neighbourhood-ties-121244">More than milk and bread: corner store revival can rebuild neighbourhood ties</a>
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<p>Four years ago, the Netherlands’ second-largest supermarket chain, <a href="https://jumbo.com">Jumbo</a>, introduced <em>Kletskassa</em> or “chat checkout”. It’s for shoppers who want to chat and aren’t in a hurry. Recognising loneliness was an issue for many, the idea was to increase social interaction between customers and staff by slowing things down and encouraging conversation. </p>
<p>Jumbo’s chief commercial officer, Colette Cloosterman-van Eerd, <a href="https://www.dutchnews.nl/2021/09/jumbo-opens-chat-checkouts-to-combat-loneliness-among-the-elderly/">explained</a>:</p>
<blockquote>
<p>Many people, especially the elderly, sometimes feel lonely. As a family business and supermarket chain, we are at the heart of society. Our shops are an important meeting place for many people, and we want to play a role in identifying and reducing loneliness.</p>
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<p>The first <em>Kletskassa</em>, in Vlijmen in Brabant, was so successful the family-owned company started rolling out slow checkouts in <a href="https://www.dutchnews.nl/2021/09/jumbo-opens-chat-checkouts-to-combat-loneliness-among-the-elderly/">200 of its stores</a>. Not only were customers responding positively, the concept also appealed to Jumbo’s employees. They are trained to recognise signs of loneliness and come up with local initiatives to combat social isolation.</p>
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Read more:
<a href="https://theconversation.com/i-tell-everyone-i-love-being-on-my-own-but-i-hate-it-what-older-australians-want-you-to-know-about-loneliness-166109">'I tell everyone I love being on my own, but I hate it': what older Australians want you to know about loneliness</a>
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<p>Cloosterman-Van Eerd said: </p>
<blockquote>
<p>We are proud our staff want to work the chat checkout. They really want to help people and make contact with them. It’s a small gesture but it’s a valuable one, particularly in a world that is becoming more digital and faster.</p>
</blockquote>
<p>The original focus of Jumbo’s initiative was older shoppers. However, the trial showed people of all ages were keen to use the <em>Kletskassa</em>. The desire for human interaction didn’t change across age groups.</p>
<p>So, these “chatty” checkouts are open to anyone who will benefit from social connection. Some Jumbo stores also have an <a href="https://www.brightvibes.com/dutch-supermarket-introduces-a-unique-chat-checkout-to-help-fight-loneliness/">All Together Coffee Corner</a>, where locals can enjoy a coffee and chat with neighbours and volunteers who also <a href="https://scoop.upworthy.com/dutch-supermarket-introduces-a-unique-slow-checkout-lane-to-help-fight-loneliness-595693-595693">help out</a> with shopping and gardening.</p>
<p>The Netherlands’ government is partnering a range of organisations, local government and companies to come up with solutions to combat loneliness across the country. Some 50% of the 1.3 million people over 75 report they regularly feel lonely. Jumbo’s initiatives are part of the Health Ministry’s <a href="https://www.globalwellnesssummit.com/blog/governments-ramp-up-the-war-on-loneliness/">One Against Loneliness</a> campaign.</p>
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<iframe width="440" height="260" src="https://www.youtube.com/embed/11SY0wG6Zc8?wmode=transparent&start=10" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Jumbo supermarket’s innovation of slow chat checkouts has been extended to 200 of its stores.</span></figcaption>
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<h2>Supermarkets as ‘third places’ to combat loneliness</h2>
<p>In the 1980s, sociologist Ray Oldenberg coined the term <a href="https://link.springer.com/article/10.1007/BF00986754">“third place”</a> – a place that’s not home (the “first place”) and not work (the “second place”). Third places are familiar public spaces where people can connect over a shared interest or activity. </p>
<p>Libraries, coffee shops, book stores, community gardens, churches, gyms and clubs are examples of third places. They all provide the opportunity for close proximity, interaction and often serendipitous conversations with other people we might not usually meet. </p>
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Read more:
<a href="https://theconversation.com/many-people-feel-lonely-in-the-city-but-perhaps-third-places-can-help-with-that-92847">Many people feel lonely in the city, but perhaps 'third places' can help with that</a>
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<p><em>Kletkassa</em> have helped thousands of people, of all ages and backgrounds, by providing a few minutes of kindness and conversation. Imagine what could be achieved if our supermarkets offered their own version of the “slow checkout” for anyone who’s in need of a chat to brighten their day. </p>
<p>The first chain to introduce this sort of initiative in Australia would have a solid advantage over competitors through differentiation and prioritising customers. At the same time, it would make a small but meaningful contribution to improving social wellbeing. </p>
<p>Challenge extended!</p><img src="https://counter.theconversation.com/content/211126/count.gif" alt="The Conversation" width="1" height="1" />
<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>For people who feel lonely, a trip to the supermarket could help – if only the store provided opportunities to chat at the checkout. A Dutch chain has done just that, and customers and staff love it.Louise Grimmer, Senior Lecturer in Retail Marketing, University of TasmaniaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2068072023-06-02T14:06:56Z2023-06-02T14:06:56ZPrice caps on groceries are not the answer to the UK’s inflation problem<p>Prime Minister Rishi Sunak is proposing a form of <a href="https://www.telegraph.co.uk/politics/2023/05/27/rishi-sunak-asks-stores-to-cap-basic-food-prices/">price caps</a> on basic food items like milk and bread to slow their price increases. This is likely to set maximum prices which sellers are not allowed to exceed, though it appears it would be voluntary.</p>
<p>Price caps are <em>loved</em> by the public: 71% of UK voters supported them <a href="https://www.independent.co.uk/news/uk/politics/boris-johnson-food-price-controls-cost-of-living-b2011148.html">in a 2022 poll</a>. But they are equally hated by economists: 75% oppose price caps even in emergency situations, according to <a href="https://www.kentclarkcenter.org/surveys/price-gouging-2/">another 2022 poll</a>. Why is there such a divide? What are the downsides of price caps?</p>
<p>The UK government <a href="https://www.telegraph.co.uk/politics/2023/05/27/rishi-sunak-asks-stores-to-cap-basic-food-prices/">is reportedly considering</a> a plan akin to what France did in the spring, where supermarkets <a href="https://www.france24.com/en/france/20230306-french-retailers-agree-to-cap-food-prices-in-bid-to-curb-inflation">were invited to</a> voluntarily freeze or cut prices on selected items to the lowest level possible. </p>
<p>A concern is that voluntary price caps won’t do much. And the danger with introducing price caps below current levels is that some suppliers are likely to drop out of the market and stop supplying. That’s because the capped prices no longer cover their costs. Thus, food price caps could lead to empty supermarket shelves. </p>
<p>There are multiple examples from other countries where price caps have led to shortages:</p>
<ul>
<li><p>Zimbabwe ordered price caps on basic goods such as groceries to fight hyperinflation in 2007. The resulting <a href="https://www.reuters.com/article/zimbabwe-prices-idUKNOA53023120070705">empty supermarket shelves</a> forced shoppers to get in line at 5am to get the bare necessities before stocks ran out.</p></li>
<li><p>Hungary capped the price of petrol in 2020. As international oil prices surged after the Ukraine invasion, suppliers could no longer cover their costs. Imports to Hungary dried up, leading to a petrol shortage. <a href="https://www.ft.com/content/4c91e656-eaae-424f-83f4-0b3c783a889c">Hungary was forced</a> to abandon the price caps to restore supply.</p></li>
<li><p>After Berlin capped rents on properties in 2020, the number of flats on the rental market decreased <a href="https://pubsonline.informs.org/doi/epdf/10.1287/mnsc.2023.4775">dramatically</a>. San Francisco had a <a href="https://www.aeaweb.org/articles?id=10.1257%2Faer.20181289">similar experience</a> in the early 1990s. </p></li>
</ul>
<h2>Alternatives</h2>
<p>So what else could be done to bring food prices down? Representatives of the UK supermarkets argue that instead of capping prices, the government <a href="https://www.just-food.com/news/uk-supermarket-price-caps-will-not-make-a-difference-says-brc/">should reduce</a> bureaucratic requirements for the industry such as border checks. But can less paperwork really reduce prices?</p>
<p>A London School of Economics study estimates that tougher Brexit border controls since January 2021 <a href="https://cep.lse.ac.uk/pubs/download/dp1888.pdf">increased food prices by 6%</a>. This number does not account for the entire food price <a href="https://www.ons.gov.uk/economy/inflationandpriceindices/articles/costoflivinginsights/food">increase of 19%</a> within the last year. </p>
<p>Nonetheless, this part of the price increases is a choice. With or without Brexit, the UK could have avoided this problem by having a more liberal border policy, but it didn’t. The EU has erected similar trade barriers against the UK, but the UK is being hit harder because it relies on the EU more for imports than the other way around. This <a href="https://theconversation.com/why-uk-inflation-is-so-high-compared-to-eu-and-us-and-what-to-do-about-it-206583">partly explains</a> why UK inflation is the highest among G7 countries.</p>
<p><strong>Consumer price inflation across the G7</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/529774/original/file-20230602-23-qth7e1.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Graph showing inflation across the G7" src="https://images.theconversation.com/files/529774/original/file-20230602-23-qth7e1.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/529774/original/file-20230602-23-qth7e1.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=464&fit=crop&dpr=1 600w, https://images.theconversation.com/files/529774/original/file-20230602-23-qth7e1.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=464&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/529774/original/file-20230602-23-qth7e1.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=464&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/529774/original/file-20230602-23-qth7e1.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=583&fit=crop&dpr=1 754w, https://images.theconversation.com/files/529774/original/file-20230602-23-qth7e1.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=583&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/529774/original/file-20230602-23-qth7e1.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=583&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://www.ons.gov.uk/economy/inflationandpriceindices/articles/foodandenergypriceinflationuk/2023">OECD</a></span>
</figcaption>
</figure>
<p>EU import border controls are <a href="https://www.bbc.co.uk/news/business-65199705">also scheduled</a> to get even tougher by the end of 2023. If an Italian supplier exports Parma ham to a German supermarket, there are no forms to fill at the border. If the Italian supplier exports that same ham to a British supermarket, they will have to pay a veterinary doctor to fill out forms declaring the meat to be safe, get those forms checked at the border, pay inspection charges and so on. </p>
<p>More EU suppliers are then likely to stop UK deliveries, or increase prices to offset the additional compliance costs. UK food prices would then rise further, which the government could avoid by loosening its own border checks.</p>
<p>Of course, red tape extends beyond border checks and imports. By reducing other regulations such as the ever increasing <a href="https://www.ft.com/content/39b61879-341f-48b0-97d9-ed7fe9bbf0d2">financial reporting requirements</a> imposed on UK companies, the government could help reduce prices at least a bit. Every additional lawyer, accountant or administrator adds to food prices – without putting more items on supermarket shelves. </p>
<h2>What would a doctor do?</h2>
<p>An unconscious patient comes into A&E with a high temperature. “Ah,” says the novice doctor who is holding the fort, “we need to bring the temperature down”. He orders an ice bath. An hour later, the patient is dead. Focusing on the symptom, the underlying cause (perhaps an infection?) was left untreated. </p>
<p>The analogy of temperature and prices is crude but apt. Like a good doctor, economists distinguish symptoms from causes. Border controls are one cause of high food prices; others include higher energy costs and too few workers for the food industry. </p>
<p>It would therefore help if the government let fruit pickers in from abroad and encouraged <a href="https://theconversation.com/over-50s-are-resigning-en-masse-new-research-explains-who-and-why-181895">inactive British workers</a> back into the workplace. It could also <a href="https://www.bbc.co.uk/news/business-65312044">speed up planning procedures</a> for wind and solar energy generation to bring electricity prices for greenhouses down, albeit the benefits would take a while to feed through. </p>
<p>Together with loosening border checks for imports, this would be a more effective response than price caps. Merely focusing on the symptoms is not the way to get the patient on the road to recovery.</p><img src="https://counter.theconversation.com/content/206807/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Christoph Siemroth receives funding from the UK Economic and Social Research Council, grant number ES/T006048/1 and ES/T015357/1. </span></em></p>Rishi Sunak is proposing to introduce voluntary caps for staples like milk and bread.Christoph Siemroth, Associate Professor (Senior Lecturer) in Economics, University of EssexLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2020582023-05-25T12:05:43Z2023-05-25T12:05:43ZHow online grocery shopping is making Britain’s urban-rural inequality worse<figure><img src="https://images.theconversation.com/files/528225/original/file-20230525-25-4slr26.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://unsplash.com/photos/Nvo5xeoccVg">Jan Kopriva/Unsplash</a></span></figcaption></figure><p>Before the pandemic, online grocery shopping was typically something younger and more affluent people living in cities indulged in. When COVID hit, though, <a href="https://theconversation.com/two-years-into-the-pandemic-which-of-our-newly-formed-habits-are-here-to-stay-178204">the market exploded</a>. </p>
<p>In the first week of the first UK lockdown, demand for Ocado home deliveries was reportedly <a href="https://www.reuters.com/article/us-health-coronavirus-britain-supermarke-idUSKBN21H210">ten times higher</a> than it had been the week before. But when COVID restrictions were re-imposed in September 2020, the online supermarket, like its competitors, was <a href="https://www.dailymail.co.uk/news/article-8750427/Ocado-warns-running-delivery-slots-second-lockdown-looms-Britain.html">still warning customers</a> that slots were selling out fast. So fast, in fact, one staffer <a href="https://www.reuters.com/article/us-health-coronavirus-britain-supermarke-idUSKBN21H210">said</a> they were going “like Glastonbury tickets.”</p>
<p>Households struggled to book delivery slots, as supermarkets rightly <a href="https://www.theguardian.com/business/2020/mar/25/supermarkets-use-database-to-prioritise-deliveries-to-elderly">prioritised</a> deliveries for elderly and vulnerable consumers. And retailers hustled to <a href="https://www.mintel.com/press-centre/click-spend-90-of-brits-plan-to-continue-online-grocery-shopping-even-after-peak-covid-19-passes/">capitalise on this rapid growth</a>. </p>
<p>In April 2020, Tesco told its customers it <a href="https://www.tescoplc.com/news/2020/our-latest-response-to-covid-19-29-april/">had hired</a> 12,000 extra staff and 4,000 new delivery drivers. Six months in, Sainsbury’s said it was delivering 700,000 online orders per week, having effectively <a href="https://www.about.sainsburys.co.uk/news/latest-news/2020/28-09-20-sainsburys-dials-up-digital#:%7E:text=Sainsbury's%20will%20deliver%20700%2C000%20online,since%20the%20beginning%20of%20March.">doubled</a> its capacity. </p>
<figure class="align-center ">
<img alt="A cat amid bags of shopping." src="https://images.theconversation.com/files/526585/original/file-20230516-29-z6wabp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/526585/original/file-20230516-29-z6wabp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/526585/original/file-20230516-29-z6wabp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/526585/original/file-20230516-29-z6wabp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/526585/original/file-20230516-29-z6wabp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/526585/original/file-20230516-29-z6wabp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/526585/original/file-20230516-29-z6wabp.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">
<figcaption>
<span class="caption">COVID lockdowns saw new demographics turn to online deliveries.</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/DPC8oN2IMcY">Daniel Romero/Unsplash</a></span>
</figcaption>
</figure>
<p>In 2019, prior to the pandemic, my colleagues and I <a href="https://www.tandfonline.com/doi/full/10.1080/09593969.2021.2017321">mapped online groceries coverage</a> by all the major UK grocers, using the “check if we deliver to your area” tool on their websites. We found that where you live affects your choice and availability of online groceries. </p>
<p>People in rural areas have <a href="https://www.cdrc.ac.uk/cdrc-analysis-uncovers-new-rural-e-food-deserts/">less access to supermarkets in general</a> and, when it comes to online grocery shopping, just over 11% of those people have no choice at all. </p>
<h2>Lack of choice</h2>
<p>When households order groceries online from the major supermarkets, their orders are usually assembled in a local supermarket, what industry insiders term an “online fulfilment store”. These have dedicated staff, storage space, vehicles and drivers. </p>
<p>This model, however, means that online groceries are <a href="https://www.mdpi.com/0718-1876/17/2/33">not available</a> in all locations. Rather, they are concentrated around the network of stores that each grocer operates. </p>
<figure class="align-center ">
<img alt="A cottage in a valley with fog overhead." src="https://images.theconversation.com/files/528238/original/file-20230525-15-sg2yw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/528238/original/file-20230525-15-sg2yw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/528238/original/file-20230525-15-sg2yw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/528238/original/file-20230525-15-sg2yw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/528238/original/file-20230525-15-sg2yw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/528238/original/file-20230525-15-sg2yw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/528238/original/file-20230525-15-sg2yw.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">
<figcaption>
<span class="caption">People living in rural Scotland have very few online options.</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/XwjICmfI0SQ">Antoine Fabre/Unsplash</a></span>
</figcaption>
</figure>
<p>On each supermarket website we inputted one postcode from each of the 41,735 neighbourhoods in Great Britain – representing 25.7m households – and recorded the result. We then counted the number of retailers delivering to each neighbourhood.</p>
<p>We found that 98% of households in Great Britain are served by at least one of Tesco, Sainsbury’s or Asda. These three grocers offer the greatest delivery coverage, particularly in urban and suburban areas where households have a choice of grocer providing home delivery. </p>
<p>Other grocers have more restricted coverage. Iceland, a budget retailer with stores in urban areas, serves only 86% of households. Ocado, meanwhile, which is more upmarket and online only, delivers to only 77% of households. </p>
<p>Many neighbourhoods – in south-west and northern England, south and mid-Wales, and in Scotland’s borders, highlands and islands – suffer poor coverage of online groceries. </p>
<p>Households in many neighbourhoods in Argyll and Bute (Scotland), for example, have a single online groceries provider (Tesco). By contrast, in nearby Glasgow, most neighbourhoods have a choice of six online grocery providers. </p>
<p>Across Great Britain, we found that
<a href="https://www.tandfonline.com/doi/full/10.1080/09593969.2021.2017321">over 11% of households</a> in the most remote rural areas have no choice of provider. They must rely on a single grocer (typically Tesco) for online groceries. </p>
<h2>Why retailers are not expanding into rural areas</h2>
<p>Rural areas that are underserved by supermarkets in general are precisely those that could benefit the most from better online provision. In urban contexts, the older, higher spending consumer demographic was newly <a href="https://www.efoodinsights.com/uk-online-grocery-report/">converted</a> to online grocery shopping. </p>
<p>In rural areas, this same demographic could therefore represent untapped demand. In other words, there is an incentive for retailers to expand there.</p>
<figure class="align-center ">
<img alt="A row of beach huts on a beach." src="https://images.theconversation.com/files/528230/original/file-20230525-23-py6r8k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/528230/original/file-20230525-23-py6r8k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/528230/original/file-20230525-23-py6r8k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/528230/original/file-20230525-23-py6r8k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/528230/original/file-20230525-23-py6r8k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/528230/original/file-20230525-23-py6r8k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/528230/original/file-20230525-23-py6r8k.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">Supermarket coverage across Wales is much thinner than for England.</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/Xvh4JikjajI">Llio Angharad/Unsplash</a></span>
</figcaption>
</figure>
<p>But that is not happening. We had rare access to data about the nationwide network of Sainsbury’s stores. <a href="https://www.mdpi.com/0718-1876/17/2/33">Over 180 of those supermarkets</a> are in London and south-east England, 85 of which are used as online fulfilment stores. This means the retailer is able to deliver groceries to all neighbourhoods in these regions. </p>
<p>In Wales, by contrast, there are only <a href="https://www.mdpi.com/0718-1876/17/2/33">four Sainsbury’s online fulfilment stores</a> concentrated around the major towns and cities in south Wales. <a href="https://www.tandfonline.com/doi/full/10.1080/09593969.2021.2017321">We found that</a> home delivery by Sainsbury’s was unavailable to 162,000 Welsh households (12%). </p>
<p>Even if all existing Sainsbury’s supermarkets in Wales were used for online deliveries, over 25% of neighbourhoods would still be <a href="https://www.mdpi.com/0718-1876/17/2/33">more than 40km</a> from their nearest fulfilment store. Drivers could have to travel over 100km to make their deliveries. This is prohibitively expensive and inefficient. </p>
<p>To expand online groceries coverage beyond the store network, retailers would need to fork out considerable sums to build more stores. Most, however, <a href="https://www.grocerygazette.co.uk/2023/03/09/plans-supermarkets-expanding/">have cut back</a> on supermarket expansion plans, focusing instead on smaller convenience stores to reflect changing shopper behaviours. </p>
<p>Amid changing consumer behaviours, online remains a key battleground for grocers. However, it <a href="https://www.economist.com/britain/2021/01/23/an-online-sales-boom-is-killing-supermarket-profits">offers lower profit margins</a> than in-store shopping due to the higher costs of order preparation and delivery. </p>
<figure class="align-center ">
<img alt="A cab with an ad for an online grocery company." src="https://images.theconversation.com/files/528227/original/file-20230525-27-z4t2n2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/528227/original/file-20230525-27-z4t2n2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/528227/original/file-20230525-27-z4t2n2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/528227/original/file-20230525-27-z4t2n2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/528227/original/file-20230525-27-z4t2n2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/528227/original/file-20230525-27-z4t2n2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/528227/original/file-20230525-27-z4t2n2.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">Will Turkish online grocer Getir expand into rural areas?</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/IXOqVutVfdM">Metin Ozer/Unsplash</a></span>
</figcaption>
</figure>
<p>Another solution is the <a href="https://www.theguardian.com/business/2023/jan/16/sainsburys-signs-deal-with-food-delivery-app-just-eat">partnership model</a> between grocers and <a href="https://theconversation.com/rapid-delivery-grocery-apps-have-flourished-during-the-pandemic-but-will-they-permanently-change-how-we-shop-162391">online platforms</a> such as Uber Eats, Just Eat and Deliveroo, who collect customer orders from smaller convenience stores (such as Tesco Express). </p>
<p>New players like the Turkish <a href="https://www.wired.co.uk/article/getir-europe-delivery-wars">online-only grocer Getir</a> offer <a href="https://theconversation.com/fast-grocery-deliveries-are-likely-to-get-more-expensive-heres-why-177502">rapid delivery services</a> using smaller, more efficient warehouses located close to the customers. However, these, too, are confined to urban areas, for now. </p>
<p>Not being able to choose where you shop has several adverse impacts. It can restrict <a href="https://www.gov.uk/government/news/cma-blocks-merger-between-sainsburys-and-asda">competition</a> in online groceries, which in turn can see customers faced with less choice of delivery slot or higher charges for home delivery. </p>
<p>And, as highlighted by the consumer choice champion <a href="https://campaigns.which.co.uk/affordable-food/">Which?</a> and the <a href="https://www.cdrc.ac.uk/priority-places-for-food-index/">Consumer Data Research Centre</a>, it can hamper access to affordable, healthy groceries, by limiting customers’ opportunity to shop around for the best deals and widest range. </p>
<p>Quite how this might change though boils down to whether the major grocers or the new innovators <a href="https://theconversation.com/inflation-the-supermarket-business-model-is-too-fragile-to-shield-customers-from-rising-food-prices-183408">are able</a> to make the investments needed to better cater to rural demand. Until then, customers in these areas will <a href="https://www.cdrc.ac.uk/cdrc-analysis-uncovers-new-rural-e-food-deserts">face the dual disadvantage</a> of poor access to larger supermarkets and fewer online grocery options to improve things.</p><img src="https://counter.theconversation.com/content/202058/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The research reported here has been undertaken by a team based at the University of Leeds, with support from the Consumer Data Research Centre, Leeds Institute for Data Analytics and Centre for Doctoral Training in Data Analytics and Society. Specific acknowledgement is given to Dr Nick Hood, School of Geography, University of Leeds for his contribution to this work.</span></em></p>People in rural areas have less access to supermarkets in general. When it comes to online grocery shopping, just over 11% of those have no choice at all.Andy Newing, Associate Professor in Applied Spatial Analysis, University of LeedsLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2060392023-05-24T15:19:06Z2023-05-24T15:19:06ZPrice inflation: five ways stronger UK supply chains can help reduce rising food costs<figure><img src="https://images.theconversation.com/files/527826/original/file-20230523-19-ys3t1z.jpg?ixlib=rb-1.1.0&rect=0%2C65%2C5462%2C3605&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/aerial-view-truck-hay-bales-agricultural-1789663295">Denis Belitsky/Shutterstock</a></span></figcaption></figure><p>Annual price inflation has recently fallen below double digits, but food costs are still rising rapidly. <a href="https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/latest">Official UK figures show food prices rose by 19.1%</a> in the year to April 2023.</p>
<p>To prevent further increases, the UK needs to face up to the deep and fundamental relationship between the rising cost of food and how it is supplied nationally.</p>
<p>At Downing Street’s recent Farm to Fork summit for the UK food industry, at least <a href="https://www.gov.uk/government/publications/outcomes-from-the-uk-farm-to-fork-summit/an-update-following-the-uk-farm-to-fork-summit-held-at-10-downing-street-on-16-may-2023#skills-and-sufficient-labour">eight key commitments</a> were made relating to supporting innovation, skills and labour, farming schemes, fair supply chains, exports, water and energy security, and cutting red tape.</p>
<p>These are fair and wise areas to address, but action speaks louder than words. Food producers, retailers and other supply chain actors all have a role to play in <a href="https://www.emerald.com/insight/content/doi/10.1108/TG-08-2017-0050/full/html">shaping policy and practice</a> to improve UK supply chains and reduce food prices.</p>
<h2>Why do we have inflated food prices?</h2>
<p>The UK should not be in this position in 2023. This is part self-inflicted, as well as down to historical events and external influences. In 2022, the Ukraine war caused hikes in <a href="https://www.theguardian.com/business/2023/may/13/why-are-uk-food-prices-still-rocketing-and-when-will-it-stop">gas, wheat and sunflower oil prices</a> due to product unavailability.</p>
<p>More recently though, the root cause of food price inflation is reportedly less event-driven and more business-derived. “<a href="https://www.theguardian.com/business/2023/mar/12/global-greedflation-big-firms-drive-shopping-bills-to-record-highs">Greedflation</a>”, or profiteering by companies, is increasingly being blamed for high prices.</p>
<p>Whatever its cause, the Resolution Foundation thinktank says: </p>
<blockquote>
<p>Food price shock is about to overtake the energy price shock as the <a href="https://www.resolutionfoundation.org/publications/food-for-thought/">biggest threat to family finances</a>.</p>
</blockquote>
<p>This price inflation also needs to be brought under control. To make this happen, the food supply chain must promote UK food security, which means access to food at affordable prices. But there are at least five fundamental issues that require attention before the government’s latest pledges can be enacted and realised. </p>
<h2>1. Feed, fertiliser and fuel costs</h2>
<p>As Ash Amirahmadi, head of UK dairy company Arla Foods, has <a href="https://www.independent.co.uk/news/uk/arla-fuel-prices-cows-ukraine-b2043926.html">repeatedly pointed out</a>, a major driver for food price rises and wholesale <a href="https://www.ons.gov.uk/economy/inflationandpriceindices/articles/costoflivinginsights/food">food price inflation hitting almost 20%</a> is the rise in feed, fertiliser and fuel costs. Managing these costs where possible within the supply chain, and identifying where government subsidies can be introduced, will contribute to a decrease in food prices.</p>
<h2>2. Retailer profits</h2>
<p>Here in the UK, supermarkets have rigid contracts. During shortages and prices hikes, rising costs can be passed on to consumers. But in a highly price sensitive environment, such as during <a href="https://theconversation.com/why-supermarkets-are-rationing-food-and-how-to-prevent-future-shortages-200557">supply shortages</a>, supermarkets may not want to charge customers more, and so costs are absorbed by farmers and their suppliers instead.</p>
<p>Food retailers, shops and supermarkets have to keep running their businesses. The <a href="https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/producerpriceinflation/march2023includingservicesjanuarytomarch2023">prices these companies sell their products for</a> incorporate the costs of production, transport and also additional profits. </p>
<p>Supermarkets such as <a href="https://www.bbc.co.uk/news/business-65312127">Tesco and Sainsbury’s</a> calculate profit margins at an average of between 3.1p and 4.1p in the pound. Releasing at least a penny or two from this margin would enable a reduction in the final cost paid by the consumer. Sainsbury’s says it has spent <a href="https://about.sainsburys.co.uk/news/latest-news/2023/27-04-23-preliminary-results">£560 million keeping prices low </a> over the last two years, but have customers actually seen this in their daily shop? </p>
<h2>3. Wage increases</h2>
<p>Food supply chains are highly interconnected – including the pay element. Workers need <a href="https://www.gov.uk/national-minimum-wage-rates">national minimum wage rises</a> as part of a wholesale improvement to tackle employability and improve job market prospects. These increases also have a positive impact on cost of living concerns, of course. </p>
<p>But labour costs also eat into the profit margins of food retailers and suppliers, and contribute to the total cost of food. Reviewing pay for those in the food sector may be very challenging or simply not possible given cost of living pressures on households at the moment. Employees need and deserve salary increments – but when and by how much should be considered in the overall context of price inflation, alongside manufacturing, logistics and other costs. </p>
<h2>4. Labour shortages</h2>
<p>General labour shortages in the logistics and supply sector are directly affecting the supply of food. There are simply <a href="https://www.gov.uk/government/statistics/recent-challenges-faced-by-food-and-drink-businesses-and-their-impact-on-prices">not enough drivers, logistics, procurement, shipping and warehousing staff nationally</a> to meet existing – let alone future – demand. Finding, funding and <a href="https://www.ft.com/content/37f898e5-7580-44a2-a204-72f9dc72b085">facilitating workforce skills development</a> to get the chain moving is critical to supply chain performance and overall costs. </p>
<figure class="align-center ">
<img alt="Red truck cab driving along an empty road with grey clouds in the background." src="https://images.theconversation.com/files/527996/original/file-20230524-25-bqw76h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/527996/original/file-20230524-25-bqw76h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/527996/original/file-20230524-25-bqw76h.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/527996/original/file-20230524-25-bqw76h.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/527996/original/file-20230524-25-bqw76h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/527996/original/file-20230524-25-bqw76h.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/527996/original/file-20230524-25-bqw76h.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">Labour including drivers to supply food are in short supply in the UK.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/truck-on-highway-301750778">lassedesignen/Shutterstock</a></span>
</figcaption>
</figure>
<h2>5. Food prices</h2>
<p>Food prices are generally set well in advance, through production planning horizons and futures contracts on perishable food staples. These factor in the forecast cost of energy and fertiliser, <a href="https://www.bbc.co.uk/news/business-62723567">which have also been rising sharply</a>.</p>
<p>Predictions of <a href="https://www.theguardian.com/business/2023/may/21/inflation-is-on-the-wane-but-a-longed-for-sharp-drop-is-far-from-in-the-bag">inflation reduction in 2023</a> have already been refuted as food prices continue to rise. This highlights the complex set of issues rooted in the engagement, involvement, interests and economic behaviour of chain actors. For the UK, this is enacted on a local level through growers, manufacturers, distributors and retailers.</p>
<h2>What are the next steps to promote food security?</h2>
<p>Lack of access to consumer products is not a new phenomenon. Major events such as Brexit and the COVID pandemic have already taken their toll on <a href="https://www.ons.gov.uk/businessindustryandtrade/internationaltrade/articles/earlyinsightsintotheimpactsofthecoronaviruspandemicandeuexitonbusinesssupplychainsintheuk/february2021tofebruary2022">UK supply chains</a>. We are still seeing shortages in many vital products such as <a href="https://www.weforum.org/agenda/2023/02/why-is-world-experiencing-medicine-shortages-and-how-can-the-generics-industry-address-supply-challenges/">medicines</a>, <a href="https://news.sky.com/story/semiconductor-strategy-1631bn-for-vital-microchip-sector-faces-criticism-12883968">semiconductors</a>, and <a href="https://www.weforum.org/agenda/2022/07/electric-vehicles-world-enough-lithium-resources/">lithium</a> for batteries – often for the same reasons as the shortages in our food supply chains.</p>
<p>As international conflict, energy and climate crises unfold and continue into the future, food supply chains must work within these constraints to ensure
<a href="https://www.emerald.com/insight/content/doi/10.1108/TG-08-2017-0050/full/html">food security</a>. Coordinated agreement for change is a must. And market makers such as food producers, distributors and retailers need to consider absorbing more corporate risk, in the form of reduced profits, “for the greater good”.</p><img src="https://counter.theconversation.com/content/206039/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Amir Sharif receives funding from the NIHR and has received research grant funding from the UKRI (MRC, Innovate UK) and British Council. He is a Fellow of the Royal Society of Arts, Institute for Leadership and Management and is a Member of the Chartered Management Institute. </span></em></p><p class="fine-print"><em><span>Kamran Mahroof and Liz Breen 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>Change and communication across the food supply chain will help stop prices from rising further.Amir M. Sharif, Dean of the Faculty of Management, Law and Social Sciences and Professor of Circular Economy, University of BradfordKamran Mahroof, Associate Professor, Supply Chain Analytics, University of BradfordLiz Breen, Director of the Digital Health Enterprise Zone (DHEZ), University of Bradford, Professor of Health Service Operations, University of BradfordLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2058702023-05-19T15:10:08Z2023-05-19T15:10:08ZFood prices are rising but farmers’ profits are still small – here’s why<figure><img src="https://images.theconversation.com/files/527016/original/file-20230518-21-44zymb.jpg?ixlib=rb-1.1.0&rect=74%2C45%2C3730%2C2075&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Farmers need a fair deal.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/rear-view-female-farmer-box-fresh-1283971126">StockMediaSeller/Shutterstock</a></span></figcaption></figure><p>More than 60 food industry representatives came together at <a href="https://www.itv.com/news/2023-05-16/families-told-to-accept-higher-food-prices-amid-no10-farm-to-fork-summit">a recent Downing Street summit</a> to discuss the UK food crisis. It was billed as an opportunity to brainstorm solutions to rising food prices, falling production and uncertainty over trade agreements with overseas partners. </p>
<p>Reports from attendees after the event have been mixed, with many seeing it only as <a href="https://www.foodmanufacture.co.uk/Article/2023/05/17/Food-industry-reacts-to-Rishi-Sunak-summit">a first step forward</a>. There is much more work to do to tackle rising food prices.</p>
<p>A <a href="https://www.gov.uk/government/publications/outcomes-from-the-uk-farm-to-fork-summit/an-update-following-the-uk-farm-to-fork-summit-held-at-10-downing-street-on-16-may-2023">report issued by the government</a> after the event showcased long-term government investment in infrastructure and the environment, <a href="https://www.nfuonline.com/media-centre/releases/nfu-response-to-farm-to-fork-summit/">which was welcomed by the National Union of Farmers</a>. </p>
<p>But it only had one short section on <a href="https://www.gov.uk/government/publications/outcomes-from-the-uk-farm-to-fork-summit/an-update-following-the-uk-farm-to-fork-summit-held-at-10-downing-street-on-16-may-2023#fairer-supply-chains:%7E:text=4.%204%3A%20Fairer%20supply%20chains">fair supply chains</a> – and that didn’t address the underlying problems. My research into unseen food supply costs shows transparency and fairness is vital to tackling current food-related challenges in the UK. </p>
<p>The UK needs healthy, nutritious and affordable food provided in a way that is fair to everyone involved. In a cost of living crisis, the media spotlight is going to fall on those in food poverty and on rising food prices. </p>
<p>These are crucial issues to address, but to have any real impact, the discussion must extend even further to cover the systemic unfairness throughout the UK food supply system. </p>
<p>Our food system is dominated by supermarket-style retailing and mass catering, which deal in bulk orders, food storage and big premises, making it very expensive to run with <a href="https://foodresearch.org.uk/publications/the-supermarket-system-balanced-on-a-knife-edge/">surprisingly few economies of scale</a>. </p>
<p>The overheads – the everyday expenses of these businesses, such as paying for staff and electricity – are huge. The profits returned to producers are minimal as a result. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/527000/original/file-20230518-14594-88d7cf.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Bar charts showing the different income methods and costs versus profits for retailers, producers and farmers." src="https://images.theconversation.com/files/527000/original/file-20230518-14594-88d7cf.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/527000/original/file-20230518-14594-88d7cf.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=1113&fit=crop&dpr=1 600w, https://images.theconversation.com/files/527000/original/file-20230518-14594-88d7cf.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=1113&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/527000/original/file-20230518-14594-88d7cf.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=1113&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/527000/original/file-20230518-14594-88d7cf.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1398&fit=crop&dpr=1 754w, https://images.theconversation.com/files/527000/original/file-20230518-14594-88d7cf.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1398&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/527000/original/file-20230518-14594-88d7cf.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1398&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://foodresearch.org.uk/publications/the-supermarket-system-balanced-on-a-knife-edge/">The Food Research Collaboration</a>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p><a href="https://www.sustainweb.org/news/nov22-unpicking-food-prices-new/">I carried out</a> research on food costs and pricing for <a href="https://www.sustainweb.org/about/">Sustain</a>, an organisation that represents the farming and fishing industries. </p>
<p>I found that out of the entire price you might pay for one grocery item, around 98%-99% goes to production and overheads for intermediary companies such as processors and distributors, and then retailers. Farmers and growers are left with the crumbs – sometimes as little as 1p of profit for each item of produce.</p>
<h2>Discounts along the food supply chain</h2>
<p>However many schemes the government has, the day-to-day survival of UK food businesses depends on a fair return on the work done to get food from farm to fork. But consumers want lower prices and to achieve this, buyers from retailers, catering and public procurement negotiate discounts. </p>
<p>As a director of a fresh produce distributor I interviewed for <a href="https://researchportal.port.ac.uk/en/publications/accounting-performance-measurement-and-fairness-in-uk-fresh-produ">an earlier project</a> said:</p>
<blockquote>
<p>Everyone wants the prices that come from trading [haggling] but the quality that comes from long-term relationships. </p>
</blockquote>
<p>When buying and selling food, organisations along the supply chain need some level of surplus for contingencies and reinvestment. <a href="https://researchportal.port.ac.uk/en/publications/discounts-as-a-barrier-to-change-in-our-food-systems">Expectations of discounts</a> from other parts of the chain, such as retailers, takes money away from those at the beginning: the farmers, growers and processors.</p>
<p>Along with negotiations for volume discounts, my research shows that these suppliers are often paid a price based on just the costs of producing the item, also called the marginal costs. This means seeds, feed, fertilisers and manual labour in the case of farmers, or ingredients, processing costs and packaging for manufacturers.</p>
<p>The trouble is, the factors that go into marginal costs – costs once overheads are covered – aren’t equal across the chain. For a supermarket, marginal cost includes all the expenses of running a store, <a href="https://foodresearch.org.uk/publications/the-supermarket-system-balanced-on-a-knife-edge/">which is typically over 90% of their costs</a>. So they set prices which enable them to cover that amount. </p>
<p>Other members of the supply chain such as farmers and growers, or bakers, class about <a href="https://foodresearch.org.uk/publications/the-supermarket-system-balanced-on-a-knife-edge/">70% of their costs as overheads</a>, leaving marginal costs of around 30%. A system where one party gets to cover over 90% of their costs while another can only cover 30% is not fair. </p>
<p>More than <a href="https://www.gov.uk/government/statistics/food-statistics-pocketbook/food-statistics-in-your-pocket">4 million people are employed</a> in the food and drink industry in the UK – around 13% of the UK workforce. Many of these people working for food businesses <a href="https://www.dailyrecord.co.uk/news/politics/one-five-food-workers-relying-29932073">need help to put food on the table</a> because of the cost of living crisis. </p>
<p>But their low wages stem from things like discounting and marginal cost negotiations by companies across the supply chain. </p>
<p>Andrew Opie, director of food and sustainability at the British Retail Consortium (<a href="https://www.brc.org.uk/">BRC</a>), <a href="https://www.thegrocer.co.uk/supermarkets/supermarkets-face-competition-probe-after-profiteering-claims/679207.article">has said</a> retailers “are investing heavily in lower prices for the future”, expanding affordable food ranges, locking the price of many essentials and offering support to vulnerable groups.</p>
<figure class="align-center ">
<img alt="Woman choosing vegetables from a shop display." src="https://images.theconversation.com/files/527019/original/file-20230518-17-xq0j56.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/527019/original/file-20230518-17-xq0j56.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/527019/original/file-20230518-17-xq0j56.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/527019/original/file-20230518-17-xq0j56.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/527019/original/file-20230518-17-xq0j56.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/527019/original/file-20230518-17-xq0j56.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/527019/original/file-20230518-17-xq0j56.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"></span>
<span class="attribution"><span class="source">Lucky Business/Shutterstock</span></span>
</figcaption>
</figure>
<h2>The need for transparency</h2>
<p>Calls for greater transparency in food supply chains were implicit in the report from the recent government forum, but there are no explicit plans to do this. This would take government action at national and international level. </p>
<p>For example, when conducting my research, I found a lot of <a href="https://www.farmbusinesssurvey.co.uk/">detailed data was available</a> on the cost of production for food by farmers and growers due to a long post-second world war history of <a href="https://researchportal.port.ac.uk/en/publications/stocks-of-knowledge-simplification-and-unintended-consequences-th">creating benchmarks for production and fostering better business practices</a>. But not as much data was available from the retail side of the market. </p>
<p>While many listed companies have to segment their financial information, <a href="https://www.about.sainsburys.co.uk/investors/results-reports-and-presentations/results-reports-and-presentations">sales categories are often only broken down into</a> “Fuel” and “Everything Else”. A BRC spokesperson said: “This information is commercially sensitive, if it was published it would have an adverse impact on competition, the very thing which has kept prices lower for consumers.”</p>
<p>But even if it is commercially sensitive information, the current situation hardly leads to transparency about costs and profits across the supply chain. </p>
<p>The dairy and other regulations proposed in the Agriculture Act 2020 and highlighted by the government following its recent Farm to Fork forum are codes of practice, not fundamental regulations or legal requirements. Unless stronger rules are created to tackle the underlying unfairness of food supply chains, the overall picture will not change in a way that benefits everyone, including consumers and producers.</p><img src="https://counter.theconversation.com/content/205870/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Lisa Jack has written unfunded reports for the Food Research Collaboration and Sustain. She receives research-consultancy funding from the ECR Retail Loss Group for projects on food waste and other retail accounting practices.</span></em></p>Food supply chain discounts are causing issues for UK producers and processors.Lisa Jack, Professor of Accounting, University of PortsmouthLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2035012023-04-19T16:45:54Z2023-04-19T16:45:54ZWhy donation requests at the checkout are wearing our patience thin<figure><img src="https://images.theconversation.com/files/521695/original/file-20230418-22-vjh4gw.jpeg?ixlib=rb-1.1.0&rect=11%2C0%2C1905%2C1276&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Since 2019, charities have accrued [more than €50 million](https://www.larrondi.org/) through donations at checkout.</span> <span class="attribution"><a class="source" href="https://pxhere.com/fr/photo/1610102">Pxhere </a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span></figcaption></figure><p>“Would you like to round up the value of your purchases to the nearest euro, to support a charity?” Recently many shoppers have had to respond yes or no to this question at the till, in aid of Ukrainians, victims of the earthquake in Eastern Turkey/Syria, or for the “Small Change” (<em>Pièces Jaunes</em>) campaign for children in hospital.</p>
<p>The sums – a few euro-cents when you’re at the till – may seem derisory. However the act of microdonation (or rounding up your bill, or gifts to ‘check-out charities’, as they’re called in the English-speaking world) is becoming increasingly common among retail brands who see it as a way to boost their reputation. This form of giving has enabled <a href="https://www.larrondi.org/">more than €50 million</a> to be collected in France since 2010.</p>
<p>Some customers find this an easy and painless way to support a charity. However, asking us to donate on each journey to the till can end up aggravating. Instead of an opportunity to show generosity, it can become a cause for embarrassment, guilt or indeed bad temper when the shopper has to say no out loud.</p>
<h2>I don’t have any money!</h2>
<p>If you experience these types of sentiments when you’re asked for a check-out donation, rest assured you’re not alone. In the US the phenomenon is so well known that a character in the cartoon South Park hits out at being solicited, and mentions of ‘Stop Asking Me to Donate’ spread over Twitter.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/3KT9IUd_Cnc?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
</figure>
<p>Following up on <a href="https://www.researchgate.net/publication/356681104_Nos_clients_ont_le_don_d%27en_faire_un_quel_role_la_proximite_enseigne-client_joue-t-elle_dans_la_decision_de_faire_un_don_en_caisse">a study</a> suggesting there are optimum conditions for attracting check-out donations – making the ask via an electronic payment terminal rather than face-to-face, in a specialist chain store, particularly in the sports and leisure sector, with a big geographical catchment – I led a Twitter analysis to understand not why people give but rather, why they refuse to do so. In this way, one can find evidence of three different causes of annoyance associated with asking for money at the till.</p>
<p>The first is over-solicitation. Due to the multiple channels through which people are asked to give – over e-mail, by telephone, in person, by mail, at the check-out etc – and places where they are asked (in the street, through their letterbox, at work, while they’re shopping, etc.) potential donors suffer from a lack of tailoring, as they’re deluged by causes that rarely interest them. In this scenario, the appeal for donations at the till is like another droplet in a water torture regime designed to drive the victim mad. A Tweet illustrates this sense of exasperation:</p>
<p>Secondly, fed-up donors pan the lack of reciprocity in the arrangement: why should we give, when the store doesn’t? In our study, looking at 706 Tweets, businesses which ask for charity donations are accused of acting selfishly in 61% of cases, compared to just 11.8% when it’s the charity itself asking for money.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/521701/original/file-20230418-26-39ypq2.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/521701/original/file-20230418-26-39ypq2.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=232&fit=crop&dpr=1 600w, https://images.theconversation.com/files/521701/original/file-20230418-26-39ypq2.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=232&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/521701/original/file-20230418-26-39ypq2.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=232&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/521701/original/file-20230418-26-39ypq2.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=291&fit=crop&dpr=1 754w, https://images.theconversation.com/files/521701/original/file-20230418-26-39ypq2.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=291&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/521701/original/file-20230418-26-39ypq2.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=291&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="attribution"><span class="source">Author</span>, <span class="license">Fourni par l'auteur</span></span>
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<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/521705/original/file-20230418-18-c25z9h.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/521705/original/file-20230418-18-c25z9h.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=113&fit=crop&dpr=1 600w, https://images.theconversation.com/files/521705/original/file-20230418-18-c25z9h.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=113&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/521705/original/file-20230418-18-c25z9h.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=113&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/521705/original/file-20230418-18-c25z9h.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=143&fit=crop&dpr=1 754w, https://images.theconversation.com/files/521705/original/file-20230418-18-c25z9h.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=143&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/521705/original/file-20230418-18-c25z9h.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=143&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="attribution"><span class="source">Author.</span>, <span class="license">Fourni par l'auteur</span></span>
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<p>Finally, annoyed shoppers question the legitimacy of chains fundraising on charities’ behalf. Customers can sometimes find it hard to tell the difference between a brand’s sincere support for a cause, and reputation laundering. Often this leads them to want to know where the donated money is going.</p>
<p>Contrary to certain assumptions, however, businesses that donate the extra pennies from rounding up the value of purchases don’t get a cut from this. Thanks to a feature installed in payment terminals by fintech social enterprise <a href="https://www.microdon.org/">MicroDON</a> (or by banks that have invested in microdonation technology, such as France’s Banque Populaire), the money given by consumers is directed in a transparent manner toward chosen charities. In France, for amounts over 5 euros per store per year, customers can even exercise their right to tax exemptions.</p>
<p>By examining the downsides of asking for money donations, it allows us to better understand how to adapt charity gift campaigns to avoid wearing out donors’ generosity. In fact, chains and charities should take into consideration customers who don’t see rounding up the value of purchases for charity donations in a positive light.</p>
<p>On the one hand, “irritated customers” sense a kind of illegitimacy in a chain associating itself with their gift, which could damage the brand’s image in their eyes and their desire to go back there. On the other, “annoyed donors,” tired of being solicited to give money wherever they go, by multiple means, without a message tailored to them, might just give up on charity appeals.</p>
<p>This study, which set out to improve the experience of charity giving, could lead us to pose the following question: at the end of the day, why should we give at all? Why aren’t the extra pennies on your bill at the till just seen as a marketing tool like so many others, a weak or effective one depending on the store? One answer to this is that generosity is associated with so many virtues, for wider society but also for oneself. The act of giving evidently gives you a warm glow inside, reducing stress and the risk of heart attack, and enables you, as promoters of charity giving would be keen to claim, to better appreciate life. Nothing less than that!</p>
<hr>
<p><em>This article was translated from French by <a href="https://twitter.com/JoshNeicho">Joshua Neicho</a></em>.</p><img src="https://counter.theconversation.com/content/203501/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Elodie Manthé ne travaille pas, ne conseille pas, ne possède pas de parts, ne reçoit pas de fonds d'une organisation qui pourrait tirer profit de cet article, et n'a déclaré aucune autre affiliation que son organisme de recherche.</span></em></p>Excessive donation requests can end up triggering donor fatigue or inspiring accusations of ‘social washing’.Elodie Manthé, Maître de Conférences en Sciences de gestion, Université Savoie Mont BlancLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2018162023-04-03T14:10:33Z2023-04-03T14:10:33ZHow food shortages affect shopping habits and why people keep switching stores<figure><img src="https://images.theconversation.com/files/518806/original/file-20230331-18-hz3biq.jpg?ixlib=rb-1.1.0&rect=0%2C60%2C5751%2C3768&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Loyal customers?</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/image-cart-full-products-supermarket-being-139129097">Pressmaster/Shutterstock</a></span></figcaption></figure><p>Three-quarters of British shoppers are <a href="https://internationalsupermarketnews.com/supermarkets-top-the-charts-for-brand-loyalty/">loyal to their usual supermarket</a>, but the UK retail sector is no stranger to the complex and fluctuating needs of its customers. </p>
<p>In the last three years alone, shops have had to deal with <a href="https://www.independent.co.uk/news/uk/politics/brexit-british-food-supermarkets-b2124661.html">Brexit</a>, a <a href="https://www.bbc.com/future/bespoke/follow-the-food/how-covid-19-is-changing-food-shopping.html">pandemic</a> and a <a href="https://www.theguardian.com/business/2022/feb/08/cost-of-living-crisis-supermarkets-prices-tesco">cost of living</a> crisis – all of which have influenced their customers’ behaviour. More recently, large UK supermarket retailers have struggled to meet customer demand for fresh fruit and vegetables, causing shortages, which has led to the need to impose buying restrictions. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/why-supermarkets-are-rationing-food-and-how-to-prevent-future-shortages-200557">Why supermarkets are rationing food and how to prevent future shortages</a>
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</em>
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<p>After <a href="https://metro.co.uk/2023/02/24/fruit-and-veg-shortage-greengrocer-says-he-has-queues-out-the-door-18341050/">some people sought alternatives</a> to satisfy their food needs and wants during recent shortages, shop owners might wonder if this switching behaviour will have a long-term effect on their customer’s loyalty. Will these shoppers switch back?</p>
<p>The concept of customer loyalty is a compelling part of any retailer’s strategy. It means better retention of customers and a reduction in marketing and management costs. But <a href="https://metro.co.uk/2023/02/24/fruit-and-veg-shortage-greengrocer-says-he-has-queues-out-the-door-18341050">loyalty can be fragile</a>, as shown by current evidence of customers switching to independent greengrocers and <a href="https://www.manchestereveningnews.co.uk/whats-on/food-drink-news/farm-shops-report-huge-sales-26484485">farm shops</a> amid recent food shortages.</p>
<p>In reality, <a href="https://www.researchgate.net/publication/344203468_Product_Unavailability_and_Shopping_Mind-set_in_Sequential_Purchases">research shows</a> that consumers are driven to meet their shopping goals and will pursue their intended purchases until they get what they want. No amount of existing loyalty can override the desire to complete a shopping goal, whether it’s buying a tomato or finding a turkey for Christmas dinner. </p>
<p>Fundamentally, <a href="https://journals.sagepub.com/doi/10.1177/109467059922004">loyalty depends</a> on a customer’s perception of what is attractive to them in the moment, as well as what they expect to be available in the future. It’s no surprise then that independent greengrocers have been <a href="https://www.theoldhamtimes.co.uk/news/23339872.no-rationing-alimentari-di-alberti-greengrocers-amid-food-shortages/">an attractive alternative</a> during recent shortages, as news reports suggested they continued to carry stocks of in-demand items of fruit and veg. </p>
<figure class="align-center ">
<img alt="A greengrocer's fruit and vegetable stall, buildings and some shoppers in the background." src="https://images.theconversation.com/files/518804/original/file-20230331-24-11bkrc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/518804/original/file-20230331-24-11bkrc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/518804/original/file-20230331-24-11bkrc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/518804/original/file-20230331-24-11bkrc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/518804/original/file-20230331-24-11bkrc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/518804/original/file-20230331-24-11bkrc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/518804/original/file-20230331-24-11bkrc.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">Recent shortages convinced some shoppers to swap supermarkets for independent sellers.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/cambridge-uk-january-7-2022-greengrocers-2105210483">cktravels.com/Shutterstock</a></span>
</figcaption>
</figure>
<h2>Stick or switch</h2>
<p>But if retailers are in danger of being “switched out” for an alternative at any time, what happens after the switch has been made? Certainly, the fear of permanent switching behaviour is the stuff of nightmares for any retailer. But if people can’t satisfy their shopping needs and so seek alternatives by switching, how long could it be before they switch back – or start shopping at an entirely new place? </p>
<p>Switching behaviour is complex, but <a href="https://www.emerald.com/insight/content/doi/10.1108/BFJ-12-2016-0622/full/html#:%7E:text=Thus%2C%20the%20more%20the%20intention,impact%20on%20consumer%20total%2Dswitching.">research shows</a> it generally happens along a spectrum:</p>
<ul>
<li>complete switching, where the temporary substitution becomes a permanent choice</li>
<li>partial switching, which is a blend between the already existing choice and incorporating a new substitution </li>
<li>continuous switching, when shoppers regularly switch between choices to gain <a href="https://journals.sagepub.com/doi/10.1509/jmkg.69.1.46.55506">perceived benefits</a> – bargain hunters fall into this category, for example. </li>
</ul>
<p>Whether a customer becomes a complete switcher depends on <a href="https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/understanding-and-shaping-consumer-behavior-in-the-next-normal">a permanent change in their beliefs and habits</a> that influences their behaviour for the long term. </p>
<p>For example, the COVID pandemic elicited some temporary changes in customer shopping. People bought different products or more of certain types, for example. </p>
<p>But the crisis also led to some <a href="https://www.accenture.com/gb-en/insights/retail/coronavirus-consumer-habits">more permanent changes</a> in shopping behaviour, including shopping more locally and also online. People were forced to try something different during the lockdowns. Some may even have had to overcome preconceived negative perceptions and beliefs to realise the benefits of their new behaviour. </p>
<figure class="align-center ">
<img alt="Empty green produce baskets lining supermarket shelves." src="https://images.theconversation.com/files/518805/original/file-20230331-28-7hjbn8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/518805/original/file-20230331-28-7hjbn8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/518805/original/file-20230331-28-7hjbn8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/518805/original/file-20230331-28-7hjbn8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/518805/original/file-20230331-28-7hjbn8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/518805/original/file-20230331-28-7hjbn8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/518805/original/file-20230331-28-7hjbn8.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">
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<span class="caption">Empty supermarket shelves.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/interior-grocery-store-empty-shelves-food-2186271497">Yau Ming Low/Shutterstock</a></span>
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</figure>
<h2>A new retail era?</h2>
<p>Perhaps the recent fresh food shortage among UK supermarkets has provided independent retailers with another opportunity to change people’s attitudes and beliefs about alternative shopping options. If so, this situation may have encouraged some people to make their temporary alternative a more permanent choice.</p>
<p>The last three years have been particularly turbulent for retailers, suppliers and customers. The most recent problems around fresh food stock shortages for large UK retailers have further highlighted how vital both big and small shops are to the retail ecosystem – and to satisfying customer needs. </p>
<p>And the shortage situation should have helped retailers make a sobering realisation about loyalty: while it is not guaranteed, a lack of loyalty should not be seen as a limitation. Shoppers that switch away, may well switch back.</p><img src="https://counter.theconversation.com/content/201816/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rachel Lee 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>Research shows what happens when people are forced to swap their favourite shops.Rachel Lee, Lecturer in Marketing, Keele UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2012162023-03-07T18:03:32Z2023-03-07T18:03:32ZHow ‘ugly’ fruit and vegetables could tackle food waste and solve supermarket supply shortages<figure><img src="https://images.theconversation.com/files/513928/original/file-20230307-20-8k3e5m.jpg?ixlib=rb-1.1.0&rect=248%2C63%2C2343%2C2019&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">'Ugly' produce might be just as delicious but still gets rejected based on looks.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/bell-pepper-head-741871045">Rosie2/Shutterstock</a></span></figcaption></figure><p>The world is facing a significant food waste problem, with <a href="https://www.fao.org/3/i4068e/i4068e.pdf">up to half of all fruit and vegetables</a> lost somewhere along the agricultural food chain. Globally, around <a href="https://www.fao.org/3/ca6030en/ca6030en.pdf">14% of food produced</a> is lost after harvesting but before it reaches shops and supermarkets. </p>
<p>Alongside food prices (66%), food waste is a concern for 60% of people that participated in a <a href="https://www.food.gov.uk/research/food-and-you-2/food-and-you-2-wave-5">recent survey</a> published by the UK Food Standards Agency. <a href="https://publications.parliament.uk/pa/cm201617/cmselect/cmenvfru/429/429.pdf">Other research</a> suggests that as much as 25% of apples, 20% of onions and 13% of potatoes grown in the UK are destroyed because they don’t look right. This means that producers’ efforts to meet stringent specifications from buyers can lead to <a href="https://publications.parliament.uk/pa/cm201617/cmselect/cmenvfru/429/429.pdf">perfectly edible produce being discarded</a> before it even leaves the farm – simply because of how it looks. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/ugly-veg-supermarkets-arent-the-biggest-food-wasters-you-are-111398">Ugly veg: supermarkets aren't the biggest food wasters – you are</a>
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</em>
</p>
<hr>
<p>Aside from the ongoing environmental implications of this food waste, UK shoppers currently face <a href="https://www.theguardian.com/environment/2023/mar/04/food-tsar-blames-shortages-on-uks-weird-supermarket-culture">produce rationing in some supermarkets</a> due to <a href="https://www.cnbc.com/2023/02/28/british-supermarkets-are-rationing-fruit-and-vegetables-amid-shortages.html">shortages of items like tomatoes, cucumbers and raspberries</a>. Any solutions that increase locally grown produce on shop shelves could improve the availability of fresh food, particularly in urban areas.</p>
<p>When imperfect fruit and vegetables don’t make it to supermarket shelves, it can be due to <a href="https://cases.open.ubc.ca/insistence-on-cosmetically-perfect-fruits-vegetables/">cosmetic standards</a>. Supermarkets and consumers often prefer produce of a fairly standard size that’s free of blemishes, scars and other imperfections. This means fruit and vegetables that are misshapen, discoloured, or even too small or too large, are rejected before they make it to supermarket shelves.</p>
<p>In recent years there has been a growing trend of selling such “ugly” fruit and vegetables, both by <a href="https://my.morrisons.com/wonky-fruit-veg/">major</a> <a href="https://www.waitrose.com/ecom/content/sustainability/food-waste">supermarket</a> <a href="https://www.tescoplc.com/news/2021/wonky-veg-5th-anniversary/">chains</a>, as well as <a href="https://wonkyvegboxes.co.uk/">speciality</a> <a href="https://www.misfitsmarket.com/?exp=plans_rollback">retailers</a> that sell <a href="https://www.oddbox.co.uk/">boxes</a> of <a href="https://etepetete-bio.de/">wonky produce</a>. And research has shown that 87% of people say they would <a href="https://www.thegrocer.co.uk/fruit-and-veg/nearly-90-of-consumers-would-eat-wonky-fruit-and-veg-according-to-new-survey/670155.article">eat wonky fruit and vegetables if they were available</a>. But other research indicates consumers can still be picky and difficult to predict. One study <a href="https://www.sciencedirect.com/science/article/pii/S0950329316302002?via%3Dihub">showed</a> consumers are likely to throw away an apple with a spot, but would eat a bent cucumber.</p>
<figure class="align-center ">
<img alt="Root vegetables, non-standard shape, oddly shaped, in a green basket; purple and orange carrots, potatoes." src="https://images.theconversation.com/files/513672/original/file-20230306-20-aw2hej.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/513672/original/file-20230306-20-aw2hej.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/513672/original/file-20230306-20-aw2hej.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/513672/original/file-20230306-20-aw2hej.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/513672/original/file-20230306-20-aw2hej.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/513672/original/file-20230306-20-aw2hej.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/513672/original/file-20230306-20-aw2hej.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Misshapen root vegetables at a French farmers market.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/trendy-ugly-misshapen-root-vegetable-french-293318456">EQRoy/Shutterstock</a></span>
</figcaption>
</figure>
<h2>Getting ugly produce into baskets</h2>
<p>So how can producers and retailers boost the amount of non-standard fruit and veg that not only reaches our shelves, but also our plates? <a href="https://www.sciencedirect.com/science/article/pii/S0377221723000668">Our recent research</a> suggests a separate channel for selling ugly produce would increase profits for growers, lower prices for consumers and boost overall demand for produce.</p>
<p>For growers, a dedicated channel – either independent or set up by a supermarket – to supply wonky fruit and veg creates a new line of business. For retailers, this provides an opportunity for further revenue over and above current sales of standard produce to shops. When selling both types of product to a single retailer, the ugly items might be undervalued compared with the standard-looking products. Our research also shows that selling the ugly produce through a dedicated channel is likely to increase total demand for fruit and vegetables, while also decreasing on-farm loss.</p>
<p>Having two parallel channels for selling produce (the main one and the dedicated “ugly” channel) would increase competition. This benefits shoppers by lowering prices for regular and ugly produce, versus selling both types of products alongside each other in one shop.</p>
<p>On the other hand, the growing market for ugly fruit and vegetables could be an economic threat to traditional retailers. It encourages new entrants into the market and could also limit the availability of “regular” produce because growers could become less stringent about ensuring produce meets traditional cosmetic standards.</p>
<p>But there is a way for traditional retailers to add ugly produce into their product offerings alongside other produce without affecting their profits. By building on existing consumer awareness of the environmental benefits of ugly food, they could also compete in this growing segment. This would benefit their bottom lines and help consumer acceptance of misshapen fruit and vegetables, possibly leading to less food waste and shortages like those UK shoppers are experiencing right now.</p>
<figure class="align-center ">
<img alt="Trendy ugly organic vegetables. Assortment of fresh eggplant, onion, carrot, zucchini, potatoes, pumpkin, pepper on green background." src="https://images.theconversation.com/files/513671/original/file-20230306-28-r3p75w.jpg?ixlib=rb-1.1.0&rect=5%2C5%2C983%2C646&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/513671/original/file-20230306-28-r3p75w.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/513671/original/file-20230306-28-r3p75w.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/513671/original/file-20230306-28-r3p75w.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/513671/original/file-20230306-28-r3p75w.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=504&fit=crop&dpr=1 754w, https://images.theconversation.com/files/513671/original/file-20230306-28-r3p75w.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=504&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/513671/original/file-20230306-28-r3p75w.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=504&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="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/trendy-ugly-organic-vegetables-assortment-fresh-1682243839">j.chizhe/Shutterstock</a></span>
</figcaption>
</figure>
<p>Boosting demand for imperfect fruit and vegetables across the supply chain will require all participants to get involved – from grower to seller. Here are some steps the various parties could take:</p>
<h2>1. Educating consumers</h2>
<p>Education about the environmental and economic impact of food waste could happen through marketing campaigns, in-store displays and even social media.</p>
<h2>2. Reducing cosmetic standards</h2>
<p>Supermarkets and other major food retailers could revise their cosmetic standards to accept a wider range of produce, including imperfect fruit and vegetables. This would help reduce food waste by making sure more produce is able to be sold.</p>
<h2>3. Direct sales</h2>
<p>Farmers and growers could sell non-standard produce directly to consumers through farmers’ markets or subscription services. This allows consumers to purchase fresh, locally grown produce that might not meet cosmetic standards for supermarkets but that is just as nutritionally beneficial.</p>
<h2>4. Food donations</h2>
<p>Supermarkets and growers could donate produce rejected for how it looks to food banks, shelters and other organisations that serve those in need. This would help reduce food waste while also providing healthy food to those who might not otherwise have access to it.</p>
<h2>5. Value-added products</h2>
<p>Produce that doesn’t meet cosmetic standards could also be used to create other products such as soups, sauces and juices. In addition to reducing food waste, this would create new revenue streams for growers and retailers.</p>
<h2>6. Food composting</h2>
<p>Anything that cannot be sold or otherwise used should be composted. This would help reduce food waste while also creating nutrient-rich soil for future crops.</p>
<p>By implementing these solutions, the supply chain can reduce the amount of ugly or imperfect fruit and vegetables that are wasted, while also providing consumers with healthy, affordable produce, even in times of supply chain shortages.</p><img src="https://counter.theconversation.com/content/201216/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Manoj Dora receives funding from UKRI, British Academy, British Council. </span></em></p><p class="fine-print"><em><span>Behzad Hezarkhani, Güven Demirel, and Yann Bouchery 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>Selling misshapen, bruised fruit and vegetables that are not a standard size requires a supply chain rethink, according to research.Behzad Hezarkhani, Reader in Operations Management, Brunel University LondonGüven Demirel, Senior Lecturer in Supply Chain Management, Queen Mary University of LondonManoj Dora, Professor in Sustainable Production and Consumption, Anglia Ruskin UniversityYann Bouchery, Associate Professor in Operations Management, Kedge Business SchoolLicensed 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">
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<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>
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<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>
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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>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>
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<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>
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<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/1896862022-09-18T20:15:10Z2022-09-18T20:15:10ZWhy ‘best before’ food labelling is not best for the planet or your budget<figure><img src="https://images.theconversation.com/files/482006/original/file-20220831-14-2yr78a.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C6720%2C4476&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Karolina Grabowska/Pexels</span></span></figcaption></figure><p>UK supermarkets have <a href="https://metro.co.uk/2022/08/03/which-supermarkets-are-scrapping-best-before-dates-and-why-17117556/">removed “best before” dates</a> on thousands of fresh food products in an effort to reduce food waste. </p>
<p>One of the major supermarket chains, Sainsbury’s, is replacing these labels with product messaging that says “<a href="https://www.fruitnet.com/fresh-produce-journal/sainsburys-axes-best-before-dates-on-more-fruit-and-veg/247057.article">no date helps reduce waste</a>”.</p>
<p>Apples, bananas, potatoes, cucumbers and broccoli are among the most wasted foods. Removing “best before” labels from these foods alone will reduce waste by an estimated <a href="https://wrap.org.uk/taking-action/food-drink/initiatives/food-waste-reduction-roadmap">50,000 tonnes a year</a>. </p>
<p>In Australia we produce <a href="https://www.fial.com.au/sharing-knowledge/food-waste">7.6 million tonnes of food waste every year</a> – about 300kg per person. <a href="https://workdrive.zohopublic.com.au/external/ba011474a921ef40d77287a482fc9b257083a646708e3b38b6debeea81cdf81b">About 70%</a> of what we throw out is still edible. Why aren’t we following the UK’s example?</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1554859827834359814"}"></div></p>
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Read more:
<a href="https://theconversation.com/scrapping-use-by-dates-could-prevent-huge-amounts-of-food-waste-heres-what-else-could-help-188085">Scrapping use-by dates could prevent huge amounts of food waste – here's what else could help</a>
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<p>Some might worry about food safety. But two types of date labels – “best before” and “use by” – are used in Australia. “Use by” labels would still alert us to when food can no longer be regarded as safe to eat. </p>
<p>And consumers will still be able to assess the state of fresh produce for themselves.</p>
<h2>Food waste has huge impacts</h2>
<p>Food waste costs Australia <a href="https://workdrive.zohopublic.com.au/external/ba011474a921ef40d77287a482fc9b257083a646708e3b38b6debeea81cdf81b">A$36.6 billion a year</a>. </p>
<p>This waste occurs right across the supply chain, including primary production, manufacturing, distribution, retail and hospitality. However, households produce more than half of the waste, at an average cost per household of A$2,000 to $2,500 a year.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1558998918742290432"}"></div></p>
<p>In 2017, the Australian government <a href="https://www.dcceew.gov.au/environment/protection/waste/food-waste?state=tas#national-food-waste-strategy">pledged to halve food waste</a> by 2030 when it launched the <a href="https://www.dcceew.gov.au/environment/protection/waste/publications/national-food-waste-strategy">National Food Waste Strategy</a>. </p>
<p>This is a complex issue, but one simple solution could be to follow the UK and remove “best before” dates. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/want-to-reduce-your-food-waste-at-home-here-are-the-6-best-evidence-based-ways-to-do-it-168561">Want to reduce your food waste at home? Here are the 6 best evidence-based ways to do it</a>
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<h2>How will you know if food is still safe?</h2>
<p>Our labelling system is fairly straightforward, but many consumers don’t understand the difference between “best before” and “use by”. This confusion leads them to throw away tonnes of food that’s still suitable for eating. </p>
<p>In Australia, the regulatory authority <a href="https://www.foodstandards.gov.au/consumer/labelling/dates/Pages/default.aspx">Food Standards</a> provides guidance for manufacturers, retailers and consumers on using dates on product labels. These dates indicate how long food products can be sold, and kept, before they deteriorate or become unsafe to eat. </p>
<p>Food with a “best before” date can be legally sold and consumed after that date. These products should be safe, but may have lost some of their quality. </p>
<p>Products past their “use by date” are considered not safe. </p>
<p>The food supplier is responsible for placing date labels on the product. </p>
<p>Differences in packaging and date labelling can be subtle. For example, lettuce sold loose or in an open plastic sleeve does not have a “best before” date. The same lettuce packaged in a sealed bag does.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/484515/original/file-20220914-13-hyzs32.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/484515/original/file-20220914-13-hyzs32.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=248&fit=crop&dpr=1 600w, https://images.theconversation.com/files/484515/original/file-20220914-13-hyzs32.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=248&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/484515/original/file-20220914-13-hyzs32.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=248&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/484515/original/file-20220914-13-hyzs32.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=311&fit=crop&dpr=1 754w, https://images.theconversation.com/files/484515/original/file-20220914-13-hyzs32.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=311&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/484515/original/file-20220914-13-hyzs32.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=311&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">‘Best before’ assessments can be highly subjective.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
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</figure>
<p>Bread is the only fresh food that uses a different system with “baked on” or “baked for” date labels. </p>
<p>Some foods, such as canned goods and food with a shelf life of two years or more, don’t have to be labelled with “best before” dates because they usually retain their quality for many years. They are typically eaten well before they deteriorate.</p>
<p>Food producers and retailers are keen to keep the labelling status quo, because it makes it easier to <a href="https://www.vox.com/22559293/food-waste-expiration-label-best-before">manage stock</a> and <a href="https://journals.sagepub.com/doi/full/10.1509/jppm.14.095">encourages turnover</a>. </p>
<h2>The case for packaging</h2>
<p>Some packaging is used to separate branded products such as fruit varieties protected by <a href="https://theconversation.com/the-case-of-the-pirated-blueberries-courts-flex-new-muscle-to-protect-plant-breeders-intellectual-property-126763">plant breeders’ rights</a>, organic products and imperfect vegetable ranges. Once packaged, these products require a “best before” date.</p>
<p>Plastic packaging can greatly increase the shelf life of some vegetables. In these cases, it effectively reduces food waste. A striking example is cucumbers. Plastic wrap can extend their shelf life from a <a href="https://theconversation.com/why-some-plastic-packaging-is-necessary-to-prevent-food-waste-and-protect-the-environment-117479">few days to two weeks</a>.</p>
<p>Vegetables such as broccoli and cauliflower contain beneficial anti-cancer compounds called <a href="https://www.frontiersin.org/articles/10.3389/fnut.2016.00024/full">glucosinolates</a>. Plastic packaging that seals in <a href="https://www.food-safety.com/articles/1324-naturally-preserving-food-with-gases">specialty gas</a> preserves these longer. However, overcooking quickly erases this packaging benefit. </p>
<figure class="align-center ">
<img alt="box full of plastic-wrapped cucumbers" src="https://images.theconversation.com/files/484733/original/file-20220914-9158-b81xvz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/484733/original/file-20220914-9158-b81xvz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=421&fit=crop&dpr=1 600w, https://images.theconversation.com/files/484733/original/file-20220914-9158-b81xvz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=421&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/484733/original/file-20220914-9158-b81xvz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=421&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/484733/original/file-20220914-9158-b81xvz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=530&fit=crop&dpr=1 754w, https://images.theconversation.com/files/484733/original/file-20220914-9158-b81xvz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=530&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/484733/original/file-20220914-9158-b81xvz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=530&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">Plastic wrap greatly increases the shelf life of cucumbers.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
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<em>
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Read more:
<a href="https://theconversation.com/why-some-plastic-packaging-is-necessary-to-prevent-food-waste-and-protect-the-environment-117479">Why some plastic packaging is necessary to prevent food waste and protect the environment</a>
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<h2>Dead or alive?</h2>
<p>The chemistry of a fruit or vegetable starts changing the moment it is picked. Some types of produce, such as bananas and pears, are picked early so they ripen in the shop and at home. Other produce, such as sweet corn and peas, rapidly decline in the quality and quantity of flavours and nutrients once they’re picked. Snap freezing is an excellent way to preserve this produce. </p>
<p>Fresh fruits and vegetables are still alive. Their cells remain full of chemical reactions and enzymatic activity. </p>
<p>This is why a cut apple turns brown. It’s also why ethylene gas released from bananas and other fruits can shorten the life of their neighbours in the fruit bowl. </p>
<p>Potatoes, one of the most wasted products, are sold with “best before” dates when packaged in plastic bags. But if stored correctly in low light and in a “breathable” bag (paper or hessian), potatoes stay “alive” and edible for months. Just make sure you cut away any green parts, which <a href="https://theconversation.com/can-you-really-be-poisoned-by-green-or-sprouting-potatoes-63437">contain toxic solanine</a>. </p>
<p>As well as fresh produce’s own cellular activity, there is microbial activity in the form of bacteria and fungi. </p>
<p>Fortunately, we come equipped with a number of evolved chemical sensors. We can <a href="https://theconversation.com/how-to-avoid-food-borne-illness-a-nutritionist-explains-153185">feel, see, sniff and taste</a> the state of fruits, vegetables and other products. Trust (and train) your instincts.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/food-expiration-dates-dont-have-much-science-behind-them-a-food-safety-researcher-explains-another-way-to-know-whats-too-old-to-eat-186622">Food expiration dates don't have much science behind them – a food safety researcher explains another way to know what's too old to eat</a>
</strong>
</em>
</p>
<hr>
<h2>Questions to ask yourself</h2>
<p>To reduce food waste, we need a combination of approaches, including appropriate packaging, sensible labelling and consumer awareness. </p>
<p>Ideally, the <a href="https://www.foodstandards.gov.au/code/pages/default.aspx">Australian and New Zealand Food Standards Code</a> would be updated to reflect a more nuanced view of packaged fresh foods.</p>
<p>In the short term, consumer awareness and buying power are the best drivers of change. Ask yourself questions like: </p>
<ul>
<li><p>Do I need a packaged product?</p></li>
<li><p>Does the packaging enhance shelf life?</p></li>
<li><p>Would I buy less if it wasn’t packaged?</p></li>
</ul>
<p>Thinking about these questions will help us reduce the impacts of food waste.</p><img src="https://counter.theconversation.com/content/189686/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>UK supermarket chains have dropped the use of “best before” date labels to reduce the amount of food being thrown out when it’s still perfectly edible. It’s just as big a problem in Australia.Louise Grimmer, Senior Lecturer in Retail Marketing, University of TasmaniaNathan Kilah, Senior Lecturer in Chemistry, University of TasmaniaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1899242022-09-14T17:06:09Z2022-09-14T17:06:09ZThree ways companies change their products to hide inflation<figure><img src="https://images.theconversation.com/files/483293/original/file-20220907-9292-15j86.jpg?ixlib=rb-1.1.0&rect=9%2C4%2C3249%2C2164&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Shopping during an inflationary uptick can require a bit more thought. </span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/mother-children-choosing-dairy-products-shop-479459437">Sergey Ryzhov / Shutterstock</a></span></figcaption></figure><p>Consumer price inflation in the UK <a href="https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/latest">slowed for the first time</a> in nearly a year in August. A fall in petrol prices helped slow the overall rate but food prices continue to rise rapidly. But even with a slowdown to 9.9%, from 10.1% in July, inflation still remains close to the highest its been for a generation. </p>
<p>After inflation hit double digit rates earlier this year for the first time since the 1970s, many looked back to compare what’s happening now with <a href="https://www.theguardian.com/business/2022/sep/05/uk-facing-1970s-style-balance-of-payments-crisis-under-liz-truss">what happened then</a>. But this comparison is problematic because it’s not just hairstyles and fashions that have changed over the past 50 years. </p>
<p>Consumer habits are also very different and that means inflation will have a different effect on how people spend and save, not to mention the products they buy, this time around.</p>
<p>For starters, markets are very different today compared with the 1970s. The internet and globalised supply chains have encouraged competition from multiple sources, with people no longer limited to the goods and services that are available locally. Economies are also increasingly based on services, rather than goods, while definitions of essential versus discretionary spending have changed.</p>
<p>Another major change is the deregulation of many state-provided monopoly services since the 1970s. Regardless of whether or not you think this has benefited society, it enables <a href="https://www.taylorfrancis.com/chapters/edit/10.4324/9780429199738-4/privatisation-consumer-john-hatch">greater price competition</a>. </p>
<p>For example, instead of a monopoly parcel service – the Post Office – passing on increased costs knowing that customers have little alternative, competition between providers such as Parcelforce, Hermes and DPD, among others, can help to keep prices low.</p>
<p>But there are certain product changes that businesses can and do make to try to quietly fold increased costs into prices. Here are three to look out for:</p>
<h2>1. Value products</h2>
<p>Unsurprisingly, sales of retailers’ “own label” groceries <a href="https://sloanreview.mit.edu/article/how-should-national-brands-think-about-private-labels/">tend to rise</a> when disposable income falls. In line with this, <a href="https://www.manchestereveningnews.co.uk/whats-on/shopping/boots-follows-asda-maximum-150-24953748">shops and supermarkets</a> have responded to recent inflation by promoting “basic” or “essentials” ranges at low price points. This also happened in the 1970s.</p>
<p>Own label groceries are <a href="https://www.iplc-europe.com/product/the-private-label-revolution-digital/?lang=en">generally more profitable</a> to retailers than selling manufacturers’ branded products anyway. But the very low price point leaves little profit margin and so supermarkets face a dilemma in that promoting budget ranges could cannibalise sales of higher margin products. </p>
<p>On the other hand, promoting individual products with low prices helps retailers give off a perception of affordability and good value. Among the UK grocery retailers, budget discounters gained ground during the financial crisis of 2007-8. </p>
<p>As inflation has soared more recently, Aldi and Lidl <a href="https://www.kantarworldpanel.com/en/grocery-market-share/great-britain/snapshot">gained</a> a combined 1.8% of UK grocery sales in the 12 weeks to August 7, 2022, representing a £2.3bn annual shift in spending. Aldi has also <a href="https://www.bbc.co.uk/news/business-62887477">recently overtaken</a> Morrisons to become Britain’s fourth largest supermarket.</p>
<p>Retailers’ keenness to come across as consumer champions fighting inflation has also been seen recently during what are normally routine supply negotiations. In July, a <a href="https://www.grocerygazette.co.uk/2022/07/01/tesco-heinz-empty-shelves/">dispute over a price increase</a> for products including tins of baked beans saw supermarket Tesco freeze its orders from food company Heinz. </p>
<p>The prospect of a Heinz-shaped space on the shelves of one of the UK’s major supermarkets quickly <a href="https://metro.co.uk/2022/07/01/why-is-tesco-not-selling-heinz-products-16924767/">hit the headlines</a> and the resulting publicity was arguably a win-win outcome for both: Tesco was seen to be fighting for the consumer, while Heinz emphasised its premium product values.</p>
<h2>2. ‘Shrinkflation’</h2>
<p>During times of inflationary cost pressures, a common strategy for manufacturers of fast moving consumer goods such as packaged foods, beverages and cosmetics, has been to hold the price of a product, but shrink its contents. </p>
<p>Often called “shrinkflation”, this quiet process can then be reversed when input costs fall again. That’s when the manufacturer will loudly promote a new, bigger product with a percentage “extra free”. </p>
<p>Although this strategy can work even when consumers’ knowledge of prices is high by moving in small increments, this is another area in which times have changed since the 1970s. Consumers’ knowledge of prices has fallen since the 1970s. </p>
<p>Reference prices (which allow comparisons of different products on a cost per amount basis) are now <a href="https://www.sciencedirect.com/science/article/abs/pii/S0022435914000025">less readily visible</a> partly because bar coding has replaced individual labels that continue to remind consumers of price after purchase, every time a product is used. </p>
<p>The rise of online shopping has empowered consumers to make their own comparisons, however. A simple web search can easily expose shrinkflation by allowing immediate comparisons of price per unit of weight/volume. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/483299/original/file-20220907-9722-z2zpwc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/483299/original/file-20220907-9722-z2zpwc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/483299/original/file-20220907-9722-z2zpwc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/483299/original/file-20220907-9722-z2zpwc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/483299/original/file-20220907-9722-z2zpwc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/483299/original/file-20220907-9722-z2zpwc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/483299/original/file-20220907-9722-z2zpwc.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">Shrinkflation in action.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/shrinkflation-concept-two-pencils-different-lengths-2165215475">Cristian Storto / Shutterstock</a></span>
</figcaption>
</figure>
<h2>3. Do it yourself</h2>
<p>It is too simplistic to say that firms make things and consumers consume them. In fact, many of the products that we consume result from the combined efforts of producer and consumer. </p>
<p>Inflationary pressures can lead to consumers substituting their own inputs for manufacturers’ own expensive inputs even more. Flat-pack furniture, for example, has reduced cost pressures on manufacturers and enabled consumers to make savings by undertaking parts of the production process themselves. </p>
<p>This trend towards “co-production” is even more marked in services that are actually more dominant in <a href="https://www.ons.gov.uk/economy/economicoutputandproductivity/output#timeseries">national economies</a> today than in the 1970s, for example banking, much of which has <a href="https://www.link.co.uk/initiatives/bank-branch-closures/">moved from branches to online</a>. Self-service, whether willingly or not, is another way that the effects of inflation can be mitigated.</p>
<h2>Permanent change?</h2>
<p>Long-term changes in consumer behaviour are more likely to emerge as a result of multiple factors rather than one single issue. And so the consequences of inflation this time around will be different because of other factors, especially climate change, the effects of the pandemic and Brexit. </p>
<p>One intriguing question is whether we will move towards a mainstream culture that is less focused on consumption. Societies have always had subcultures that espouse <a href="https://academic.oup.com/jcr/article/48/5/796/6292090?login=true">minimalist consumption values</a>, but there has been an emerging <a href="https://www.bloomberg.com/news/features/2021-12-07/why-people-are-quitting-jobs-and-protesting-work-life-from-the-u-s-to-china">trend</a> for people to reassess their life choices and priorities in recent years. </p>
<p>Soaring inflation, climate change (and climate shame) and the skills gained during lockdown could provide another push to shift such fringe attitudes into the mainstream.</p><img src="https://counter.theconversation.com/content/189924/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Adrian Palmer 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>How to spot the changes made to goods and services as a result of rising costs.Adrian Palmer, Professor of Marketing, University of ReadingLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1894452022-09-11T20:10:20Z2022-09-11T20:10:20ZAre home-brand foods healthy? If you read the label, you may be pleasantly surprised<figure><img src="https://images.theconversation.com/files/481243/original/file-20220826-10486-57vwme.jpg?ixlib=rb-1.1.0&rect=2%2C2%2C1914%2C1273&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://unsplash.com/photos/YNaSz-E7Qss">Joshua Rawson-Harris/Unsplash</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>The cost of groceries in Australia has sky-rocketed this year. So people may be tempted to switch to home-brand foods to save on their weekly food bill.</p>
<p>Home-brand foods are certainly cheaper. But are they healthy?</p>
<p>Here’s what we know about the nutrients they contain compared with the more expensive named brands.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/how-to-save-50-off-your-food-bill-and-still-eat-tasty-nutritious-meals-184152">How to save $50 off your food bill and still eat tasty, nutritious meals</a>
</strong>
</em>
</p>
<hr>
<h2>What are home-brand foods?</h2>
<p>Home-brand foods have various names. You might hear them called supermarket own-brand foods, private label, in-house brands, store brands, or retailer brands.</p>
<p>These are foods made specifically for a supermarket (you cannot buy them at a competing store). They are advertised as low-priced alternatives to more expensive items.</p>
<p>Home-brand foods are widely available in Australia and other countries, making <a href="https://www.jstor.org/stable/43966481#metadata_info_tab_contents">up to 30%</a> of what you can buy at a supermarket.</p>
<p>Some people once viewed these as inferior products. But their nutrient content, and wide availability in supermarkets, may play a role in boosting population health. Some evidence <a href="https://pubmed.ncbi.nlm.nih.gov/30991733/">shows</a> home-brand foods increase availability and accessibility to more affordable food options, and contribute to improving food safety standards.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/frozen-canned-or-fermented-when-you-cant-shop-often-for-fresh-vegetables-what-are-the-best-alternatives-131678">Frozen, canned or fermented: when you can't shop often for fresh vegetables, what are the best alternatives?</a>
</strong>
</em>
</p>
<hr>
<h2>Why are they cheaper?</h2>
<p>Cheaper prices associated with home-brand products are possible due to lower costs associated with research and development, marketing and packaging. This means we cannot assume lower prices mean cheaper or inferior ingredients. </p>
<p>In fact, supermarkets can influence the ingredients and processing of home-brand foods by <a href="https://pubmed.ncbi.nlm.nih.gov/32517118/">benchmarking</a> against named brands.</p>
<p>Before a home-brand product is made, stores will also specify to manufacturers what it should cost to consumers. Manufacturers often choose to use the same ingredients and processes as name-brand products to reduce costs through economies of scale.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/481966/original/file-20220831-16-uw9a0i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Pasta on fork" src="https://images.theconversation.com/files/481966/original/file-20220831-16-uw9a0i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/481966/original/file-20220831-16-uw9a0i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=495&fit=crop&dpr=1 600w, https://images.theconversation.com/files/481966/original/file-20220831-16-uw9a0i.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=495&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/481966/original/file-20220831-16-uw9a0i.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=495&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/481966/original/file-20220831-16-uw9a0i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=622&fit=crop&dpr=1 754w, https://images.theconversation.com/files/481966/original/file-20220831-16-uw9a0i.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=622&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/481966/original/file-20220831-16-uw9a0i.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=622&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Pasta tonight? Home-brand pasta may use the same ingredients as named brands.</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/-sbE6MDlEuM">Jean-claude Attipoe/Unsplash</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>This means not having to clean or reprogram equipment between making the different products. It also means most home-brand products are very similar to branded products, aside from the packaging. </p>
<p>However, for mixed foods, such as breakfast cereals and pre-made sauces, the manufacturer may change the ingredients, such as using cheaper or fewer ingredients, to help reduce costs.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/how-australians-talk-about-tucker-is-a-story-thatll-make-you-want-to-eat-the-bum-out-of-an-elephant-121492">How Australians talk about tucker is a story that'll make you want to eat the bum out of an elephant</a>
</strong>
</em>
</p>
<hr>
<h2>How much can I save?</h2>
<p>Home-brand products can be up to <a href="https://www.choice.com.au/shopping/everyday-shopping/supermarkets/articles/cheapest-groceries-australia">40% cheaper</a> than named brands. So yes, home-brand products can make a real difference to the total cost of groceries. </p>
<p>However, some products have bigger cost savings than others, as we show below.</p>
<p><iframe id="tc-infographic-733" class="tc-infographic" height="400px" src="https://cdn.theconversation.com/infographics/733/9ea5f27f63804f786d66738bbd9e8f1d36b6893e/site/index.html" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>Most labels on supermarket shelves show the cost per 100g (or equivalent) for an item, which can help shoppers choose the most cost-effective option, especially useful when items are on sale.</p>
<h2>But are they healthy?</h2>
<p>For simple, unprocessed products such as milk, eggs and pasta there is virtually no difference in nutritional quality between home-brand and named brand foods. There is very little the manufacturers can do to modify ingredients to reduce costs.</p>
<p>But sometimes cheaper ingredients are used in higher concentrations in home-brand products. For example, home-brand pre-made pasta sauces may have less of the vegetable ingredients, and greater amounts of sugar, sodium (salt), and additives (such as stabilisers, colours and flavours). This may change the quality and taste.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/481967/original/file-20220831-18-xgxdsp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Tomato dish and pan of boiling water on gas stove" src="https://images.theconversation.com/files/481967/original/file-20220831-18-xgxdsp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/481967/original/file-20220831-18-xgxdsp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/481967/original/file-20220831-18-xgxdsp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/481967/original/file-20220831-18-xgxdsp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/481967/original/file-20220831-18-xgxdsp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/481967/original/file-20220831-18-xgxdsp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/481967/original/file-20220831-18-xgxdsp.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">If you’re using pre-made pasta sauce, the quality may vary. So check the label.</span>
<span class="attribution"><a class="source" href="https://www.pexels.com/photo/faceless-person-preparing-delicious-meatballs-with-tomato-sauce-in-kitchen-6248816/">Gary Barnes/Unsplash</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>Very few studies have explored how home-brand products may differ in nutritional profile. </p>
<p>Overall, <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1747-0080.2011.01511.x">serving size</a>, <a href="https://www.mdpi.com/2072-6643/7/8/7027">sodium</a> and other nutrients appear similar across home-brand and named brand food. But there are some differences with certain food types.</p>
<p><strong>Serving sizes</strong></p>
<p>For instance, serving sizes are <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1747-0080.2011.01511.x">generally smaller</a> in home-brand pizza, canned legumes, grains, biscuits and ready meals. In fact, edible oil is the only type of food where serving size is greater for home-brand foods.</p>
<p><strong>Salt</strong></p>
<p>Sodium levels of home-brand breakfast cereals, cheese and bread <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1747-0080.2011.01511.x">are higher</a> than branded products. But sodium levels of cooking sauces, frozen potato products (such as oven-baked fries) and biscuits are lower in home-brand foods.</p>
<p><strong>Other nutrients</strong></p>
<p>For energy and fat intake, again it seems there are inconsistent differences between home-brand foods compared to branded foods. </p>
<p>How about sugar? Unfortunately, the studies didn’t look at this.</p>
<p>In fact, overall, Australian home-brand products are not consistently nutritionally different to branded products.</p>
<p><strong>Health star ratings</strong></p>
<p>On a related note, unhealthy home-brand products – such as juices, meat pies and muesli bars – are <a href="https://pubmed.ncbi.nlm.nih.gov/30304807/">more likely</a> to include a health star rating, compared to nutritious foods. This may incorrectly imply they are a healthy choice.</p>
<p>This means no matter which brand you choose, remember to <a href="https://www.eatforhealth.gov.au/sites/default/files/files/eatingwell/efh_food_label_example_130621.pdf">check the food label</a> to make sure you are getting the quality of food you like for the price you are comfortable with.</p><img src="https://counter.theconversation.com/content/189445/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Lauren Ball receives funding from the National Health and Medical Research Council, RACGP Foundation, VicHealth and Queensland Health. She is a Director of Dietitians Australia.</span></em></p><p class="fine-print"><em><span>Katelyn Barnes is an executive member of the Australasian Association of Academic Primary Care.</span></em></p>Looking to save money on your grocery bill but not sure about home-brand food? It’s actually a healthy option, with a few exceptions.Lauren Ball, Associate Professor and Principal Research Fellow, Menzies Health Institute, Griffith UniversityKatelyn Barnes, Postdoctoral Research Fellow, Griffith UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1893832022-09-05T00:47:38Z2022-09-05T00:47:38ZNZ’s most walkable towns and cities ranked: see how your neighbourhood stacks up<figure><img src="https://images.theconversation.com/files/482632/original/file-20220904-39859-3ilmlw.jpg?ixlib=rb-1.1.0&rect=7%2C15%2C5153%2C3391&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Getty Images</span></span></figcaption></figure><p>If you live in a city or town, you have a mental map of the places you travel to most. But how accessible are those places, and how long does it take you to get there? Most of all, could you do everything you need to do without a car?</p>
<p>These are the kinds of questions advocates for more liveable urban areas are asking now with greater urgency. Climate change, rising fuel costs and social connectedness are driving the move towards “15-minute cities” – although the actual number of minutes can vary depending on a city’s ambition.</p>
<p>Copenhagen, for instance, is aiming to be a five-minute city, while Melbourne is opting for ten. New Zealand cities are also getting on board, with Christchurch and Wellington wanting to be 15-minute cities, and Hamilton a <a href="https://hamilton.govt.nz/environment-and-sustainability/climate-change/our-climate-change-response/">20-minute city</a>.</p>
<p>The idea is not that you can get across an entire city in that time, rather that your own neighbourhood has everything you need within reach by foot, bike or public transport. For simplicity, we just call it the “x-minute neighbourhood”.</p>
<p>Our <a href="https://authors.elsevier.com/c/1fg64y5jOnHws">recently published research</a> evaluates all of New Zealand’s urban areas and compares them with the largest 500 cities in the US for residents’ proximity to daily needs. So, how do they currently stack up and what are some of the key challenges? </p>
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<img alt="" src="https://images.theconversation.com/files/482633/original/file-20220904-37832-uu9olo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/482633/original/file-20220904-37832-uu9olo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/482633/original/file-20220904-37832-uu9olo.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/482633/original/file-20220904-37832-uu9olo.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/482633/original/file-20220904-37832-uu9olo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/482633/original/file-20220904-37832-uu9olo.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/482633/original/file-20220904-37832-uu9olo.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">Everything within easy reach: Copenhagen aims to be a five-minute city.</span>
<span class="attribution"><span class="source">Getty Images</span></span>
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<h2>How we measured accessibility</h2>
<p>New Zealand’s <a href="https://environment.govt.nz/what-government-is-doing/areas-of-work/climate-change/emissions-reduction-plan/">emission reduction plan</a> requires a 20% decrease in urban vehicle travel by 2035. This shift towards sustainable transport modes will also require changes to the form of our urban areas. </p>
<p>New transport strategies are beginning to reflect this. But how do cities evaluate urban change, measure the impact of proposed development, or effectively retrofit existing neighbourhoods?</p>
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<strong>
Read more:
<a href="https://theconversation.com/12-best-ways-to-get-cars-out-of-cities-ranked-by-new-research-180642">12 best ways to get cars out of cities – ranked by new research</a>
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<p>By evaluating New Zealand’s 42 urban areas and the largest 500 US cities, our goal was to propose a consistent and transparent approach for reporting. We also wanted to help cities make the transition to sustainable urban design effectively and efficiently.</p>
<p>We developed a dashboard to show the proximity of neighbourhood blocks (the smallest geographical unit in the New Zealand census) to their nearest amenities. If you live in one of these urban areas you can check out your neighbourhood’s accessibility using our <a href="https://projects.urbanintelligence.co.nz/x-minute-city/">interactive guide</a>. </p>
<p>The dashboard enables councils to understand accessibility (and lack of it) in their towns and the neighbourhoods within them. Our ongoing research aims to identify the locations with the best accessibility, which should help with incentives and guidance for new development.</p>
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<p><iframe id="dnvKP" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/dnvKP/4/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
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<h2>Mixed messages</h2>
<p>So how do New Zealand cities rate? Wellington is the most accessible, with 61% of residents living within 15 minutes’ walk of the amenities we studied. But this pales next to New York (88%) and San Francisco (73%).</p>
<p>Auckland has only 43% of residents within 15 minutes of core amenities. Hamilton (with the goal of becoming a 20-minute city) scored 39%. And Christchurch (with an unofficial target of 15 minutes) also came in at 39%.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/10-images-show-just-how-attractive-australian-shopping-strips-can-be-without-cars-186460">10 images show just how attractive Australian shopping strips can be without cars</a>
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<p>Notably, it is access to the supermarket that is most detrimental to a city’s score. Accessible grocery stores are a key part of walkable neighbourhoods, and without them we’ll never achieve transport emission goals. </p>
<p>It’s disappointing, then, that this important factor was overlooked in the Commerce Commission’s <a href="https://comcom.govt.nz/news-and-media/media-releases/2022/grocery-market-study-recommends-changes-to-improve-competition-and-benefit-consumers">review of the supermarket sector</a>. This failure to factor in climate change to industry and competition policy was underscored by the <a href="https://www.1news.co.nz/2022/08/25/watch-ardern-given-tour-around-aucklands-costco-megastore/">prime ministerial visit</a> to US bulk retailer Costco on its arrival in New Zealand. </p>
<p>This type of car-dependent development is the antithesis of walkable, sustainable neighbourhoods, and of the government’s emissions reduction plan. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/482635/original/file-20220904-52062-gm8wvd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/482635/original/file-20220904-52062-gm8wvd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/482635/original/file-20220904-52062-gm8wvd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/482635/original/file-20220904-52062-gm8wvd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/482635/original/file-20220904-52062-gm8wvd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/482635/original/file-20220904-52062-gm8wvd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/482635/original/file-20220904-52062-gm8wvd.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">Wellington is NZ’s most accessible city: 61% of residents live within 15 minutes’ walk of the amenities we studied.</span>
<span class="attribution"><span class="source">Getty Images</span></span>
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</figure>
<h2>The benefits of accessible neighbourhoods</h2>
<p>The primary motivation for better urban design is to encourage active transport modes and reduce reliance on cars. But the benefits far exceed transport emissions alone. </p>
<p>Increased social cohesion is one co-benefit. In Paris, they call this form of urbanism “neighbourhoods of proximities” because they’re increasing proximity between people and places, but also between people themselves. This improves social connection and has mental health benefits. </p>
<p>Public health is another benefit. <a href="https://www.sciencedirect.com/science/article/pii/S0160412019315223?via%3Dihub">Studies</a> have shown Barcelona’s approach (which also prioritises active transportation through urban design) has avoided around 700 premature deaths a year due to reductions in air pollution, noise and heat, and increases in physical activity. </p>
<p>There are also huge benefits for young, older and lower income families who become less reliant on cars. There are flow-on benefits in the form of economic vibrancy and urban safety, too.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/greening-the-greyfields-how-to-renew-our-suburbs-for-more-liveable-net-zero-cities-187261">Greening the greyfields: how to renew our suburbs for more liveable, net-zero cities</a>
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</em>
</p>
<hr>
<h2>Getting out of our cars</h2>
<p>Finally, we also need to ask whether 20-minute and 15-minute neighbourhoods can achieve the benefits they seek. In reality, how likely are people to walk 20 minutes carrying groceries? Studies from overseas suggest much shorter distances between homes and amenities might be needed. </p>
<p>This will vary depending on the person, their age and fitness. But it will also depend on the amenities themselves. We might be happy to bike or walk further to school, for example, than we would be to walk home from the grocery store. </p>
<p>So while the concept of the 15-minute or 20-minute city might be useful to communicate a broad vision and bring people together, it shouldn’t be taken too literally. </p>
<p>The greater aim should be to improve accessibility as much as possible to reduce our dependence on cars and reclaim our neighbourhoods for people. This will benefit our health, sustainability and communities.</p><img src="https://counter.theconversation.com/content/189383/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tom Logan is technical director of planning firm Urban Intelligence Ltd. He receives funding from MBIE and BRANZ. </span></em></p>A comparison of 42 urban areas in New Zealand with 500 towns and cities in the US shows how much better local urban design has to be if we’re serious about reducing reliance on cars.Tom Logan, Lecturer of Civil Systems Engineering, University of CanterburyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1880852022-08-08T15:00:34Z2022-08-08T15:00:34ZScrapping use-by dates could prevent huge amounts of food waste – here’s what else could help<figure><img src="https://images.theconversation.com/files/477857/original/file-20220805-7849-chxbry.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Supermarkets are beginning to remove date labels on fruit and veg to tackle the food waste issue.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/woman-standing-front-row-produce-grocery-358499339">Adam Melnyk/Shutterstock</a></span></figcaption></figure><p>Before ending up on a European supermarket shelf, an avocado has effectively emitted <a href="https://www.blog.industrialecology.uni-freiburg.de/wp-content/uploads/2019/03/LCA_tropical_fruits_Julian_Egle_Tobias_Bahmer_Peiman_Hadjian.pdf">1.3 kilograms of carbon</a> into the atmosphere. Its production alone consumes <a href="https://waterfootprint.org/media/downloads/Report47-WaterFootprintCrops-Vol1.pdf">60 gallons of water</a>. Despite this, the fruit will often be discarded as household waste.</p>
<p>Wastage occurs at each stage of the food supply chain, but household food waste is one of the most significant. British households waste an estimated 6.7 million tonnes of food each year, amounting to approximately 32% of all purchased food items. </p>
<p>Household food waste is also notoriously difficult to manage. <a href="https://www.emerald.com/insight/content/doi/10.1108/BFJ-03-2020-0195/full/html">Studies</a> show that consumers often both fail to understand the environmental consequences of food waste, and are rarely held accountable for it.</p>
<h2>Household food waste is the result of mismanagement</h2>
<p>Much of this wastage is avoidable and the food may have been eaten had it been better managed. This has prompted <a href="https://www.theguardian.com/business/2022/aug/01/waitrose-removes-best-before-dates-from-fresh-food-to-reduce-waste">Waitrose</a> to join a growing number of food retailers in removing date labelling, such as the “use-by” or “best-before” date, from some fresh food items in an attempt to reduce household food waste.</p>
<p>Past studies have confirmed the importance of date labelling on consumers’ decision making. <a href="https://link.springer.com/article/10.1007/s12351-017-0352-3">Almost 60%</a> of western European consumers surveyed said they “always” check date labels while purchasing a food item or preparing a meal.</p>
<p>But the routine application of date labelling has long come under criticism. A <a href="https://www.sciencedirect.com/science/article/pii/S266615432200028X?via%3Dihub">recent study</a> attributed consumers’ failure to understand the application of date labelling to an increased likelihood of irrational decision making. Indeed, <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/ijcs.12634">research</a> has shown that consumers commonly reject edible, but date-expired food, rejecting up to 56.7% of such food on average.</p>
<p>The <a href="https://ift.onlinelibrary.wiley.com/doi/abs/10.1111/1541-4337.12086">Institute of Food Technologists</a> additionally question whether date labels are an accurate measure of food safety anyway, as post-packaging temperature control cannot be assured.</p>
<p>The removal of date labelling is therefore a promising start. Without date labels, often dubious information that may interfere with the consumers perception of what is edible, is removed. Instead, consumers are encouraged to <a href="https://toogoodtogo.co.uk/en-gb/campaign/commitment">sense-check</a> fresh food items.</p>
<p>In the case of an avocado, the <a href="https://www.healthline.com/nutrition/when-is-an-avocado-bad#2.-Blackened-skin">advice</a> given to consumers is that when ripe, it should have a “pleasant and slightly sweet aroma”, whilst the skin should be “dark green or brown”. Information is also provided on how an avocado should look, taste, and feel when “overripe”. It is hoped that a better informed consumer will be less likely to blindly discard food due to a lapsed date.</p>
<p>The Waste and Resources Action Programme (WRAP) <a href="https://wrap.org.uk/sites/default/files/2022-02/WRAP-Reducing-household-food-waste-and-plastic-packaging-Summary.pdf">predict</a> that approximately 50,000 tonnes of food waste could be avoided each year in the UK if date labels were removed from just apples, bananas, potatoes, cucumber and broccoli.</p>
<h2>Should retailers be doing more?</h2>
<p>Despite growing momentum in date label removal, industry stakeholders remain insistent that retailers are duty-bound <a href="https://wrap.org.uk/taking-action/food-drink/initiatives/food-waste-reduction-roadmap">to do more</a>.</p>
<p><a href="https://food.ec.europa.eu/system/files/2022-02/fw_eu_actions_dm_20211130_report_1.pdf">Some research</a> suggests that retailers should also explore alternative ways of expressing labelling to better meet consumers’ informational needs. <a href="https://www.researchgate.net/publication/341448757_Best_before_often_good_after_Re-Scripting_the_Date_Label_of_Food_in_Norway">Re-scripted date labels</a> such as “best before, often good after” may encourage the acceptance of “date-expired” foods in the knowledge that the item remains safe to consume.</p>
<p>Encouraging people to buy appropriate amounts of food items is also an effective way of reducing food waste. Supermarkets are being placed under <a href="https://wrap.org.uk/resources/report/reducing-household-food-waste-and-plastic-packaging">increasing pressure</a> to sell loose products. WRAP forecast <a href="https://wrap.org.uk/sites/default/files/2022-02/WRAP-Reducing-household-food-waste-and-plastic-packaging-Summary.pdf">considerable waste reductions</a> should this be implemented nationwide.</p>
<h2>Changing the behaviour of consumers</h2>
<p>Gradually changing ingrained consumer behaviour, through long-term awareness campaigns is <a href="https://onlinelibrary.wiley.com/doi/full/10.1002/bse.1966">often considered</a> key to reducing food waste. Commercial campaigns and targeted community outreach programmes can contribute to a greater understanding of the science behind date labels. They can also encourage consumers to source food locally and participate in <a href="https://www.theguardian.com/food/2022/jan/24/uk-could-grow-up-fruit-and-vegetables-urban-green-spaces">urban farming schemes</a>. </p>
<p>A <a href="https://www.theguardian.com/environment/2021/dec/15/city-allotments-could-be-as-productive-as-conventional-farms-research-finds">pilot study</a> at the University of Sussex analysed fruit and vegetable yields from 34 urban allotments. They found that urban growers were able to grow 1kg of fruit and vegetables per sq metre, a yield within the range of a conventional farm. </p>
<figure class="align-center ">
<img alt="Five allotment patches with densely built houses and a cloudy blue sky in the background." src="https://images.theconversation.com/files/477855/original/file-20220805-29596-nq4d1z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/477855/original/file-20220805-29596-nq4d1z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/477855/original/file-20220805-29596-nq4d1z.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/477855/original/file-20220805-29596-nq4d1z.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/477855/original/file-20220805-29596-nq4d1z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/477855/original/file-20220805-29596-nq4d1z.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/477855/original/file-20220805-29596-nq4d1z.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">
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<span class="caption">Urban allotments can often be very productive.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/antwerp-belgium-july-2020-city-garden-1939378696">Kristof Bellens/Shutterstock</a></span>
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<p><a href="https://www.sciencedirect.com/science/article/abs/pii/S0959652618304438">Changing consumers’ perceptions</a> through innovative social and commercial initiatives, also represent increasingly popular food waste reduction strategies. Downloadable meal planning and <a href="https://stopfoodwaste.org/tips/plan/shopping-tips">smart shopping tips</a> both encourage responsible shopping practices. </p>
<p>Fresh food box schemes which supply precise quantities of ingredients for specific dishes also substantially reduces household food waste. The Wuppertal Institute <a href="https://cdn.hellofresh.com/gb/cms/Sustainability/Summary_GlobalFoodWasteStudy.pdf">reports</a> that HelloFresh meals generate 51% less food waste than non-HelloFresh meals.</p>
<p>While the removal of date labels indicates a growing desire to reduce food waste, it is effective only if consumers are supported with better information and encouraged to simultaneously adopt more sustainable shopping practices. While changing dietary culture and consumer behaviours towards greater sustainability is an arduous process, it is a necessary one as we transition towards greater responsibility in food waste management.</p><img src="https://counter.theconversation.com/content/188085/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Lingxuan Liu receives funding from ESRC and BBSRC of UKRI. </span></em></p>British households waste nearly 32% of all purchased food items per year.Lingxuan Liu, Lecturer in Sustainability, Lancaster UniversityLicensed as Creative Commons – attribution, no derivatives.