The supermarkets’ ongoing ‘conspiracy against the poor’
Well, well, we’ve had another couple of rounds in the battle of the supermarket PR wars. First, we saw Woolworths and Coles continue their expensive media campaigns telling us about their “single pricing policy.” Then last week came the launch of the Woolworths “price check” website.
On each occasion we were told how “good” the particular announcement was for consumers only to find that the supermarket chains had failed to give consumers the full picture. Statements were made about “price cuts,” but consumers didn’t get the full list of products affected and the price changes.
Woolworths, for example, repeatedly told us that the price of 3,500 products had been reduced and now the prices of those products were lower than a year ago. We are still to get the full list of 3,500 items and price reductions. We are also yet to be told whether there have been any price rises on any of the other 26,500 or more products typically sold at a Woolworths or Coles supermarket.
Finally, we also need an indication from Woolworths of how many of the 3,500 products are imported or made from imported ingredients. What’s the significance of whether the products are imported? Simple. Given that the Aussie dollar appreciated during 2009 and has remained strong, it’s clear that imported products and ingredients now cost less. The price of imported products and ingredients should be falling and consumers should be getting the full benefit of the stronger Aussie dollar.
This all begs the question: How many of the upwards of the 30,000 grocery products typically sold at a Woolworths or Coles supermarket are imported or made from imported ingredients? One would be expecting the retail prices of all these imported products or ingredients to be falling. Again, we need to see the full picture before we can properly assess the PR coming from the supermarket giants.
This equally applies to the adoption of a single pricing policy by Woolworths and Coles. Woolworths states it has around 12,000 items at the same price nationally, with Coles stating that it has around 8,000 items at the same price nationally. We are yet to be given a full list. Mind you, the adoption of a single pricing policy by the supermarket chains does raise a very interesting issue. Readers will recall that the Blacktown Amendment drafted by this author would legally require a retailer, like Woolworths or Coles, to sell the same product at the same price in the same geographic area. That’s the legal equivalent of a single pricing policy that Federal Competition Minister, Craig Emerson, dismissed as a “conspiracy against the poor.” That clearly raises the question of whether Minister Emerson also views the Coles and Woolworth single pricing policy as “a conspiracy against the poor.”
Sadly, if there is any “conspiracy against the poor” it’s in the form of geographic price discrimination where the supermarket giants have historically charged a different price for the same product in different stores. With regular surveys showing that the same basket of grocery items can cost more in lower socio-economic areas, it’s clear that geographic price discrimination disadvantages consumers in those areas doing it tough. What’s needed is a legal guarantee in the form of the Blacktown Amendment that ensures that Woolworths and Coles charge the same low price for a product whether it’s sold in Blacktown or Vaucluse or whether it’s sold in Footscray or Toorak. Without such a legal guarantee, consumers will continue to be ripped off through geographic price discrimination.
Now that single pricing for thousands of products out of the bag, Woolworths last Thursday turned up the heat in the PR wars by launching its “price check” website. The new Woolworths price check website follows the growing calls from consumer advocates, including this author and the consumer organisation Choice, for the major supermarket chains to publish on their respective websites the prices of all products they sell. Publishing comprehensive pricing information on websites has long been technically feasible and now that the Woolworths price check website is up and running it’s essential that the website is as informative and user friendly as possible.
Unfortunately for consumers the Woolworths price check website currently leaves a lot to be desired. From the outset, consumers are confronted with a legal minefield with Woolworths requiring consumers to accept the so-called “Price Check Terms & Conditions” before being able to access the website. Having a law degree or needing to obtain legal advice should not be a pre-requisite for using the Woolworths price check website. The “price check terms and conditions” raise a host of legal questions and regrettably can give rise to a range of unintended consequences.
Once past the legal fine print, consumers are given pricing information on only about 5,000 out of the upwards of 30,000 or more grocery items typically sold in a Woolworths supermarket. The pricing information on the Woolworths price check website is only a fraction of the pricing information that Woolworths can and should be providing to consumers. Until the Woolworths price check website includes the prices of all products in each of its supermarkets, consumers will not be getting the full picture. If it’s technically feasible for Woolworths to publish on its website the prices of 5,000 products, then it’s surely technically feasible to publish online the prices of all 30,000 or more products.
Even in publishing the prices of 5,000 items Woolworths could do much more to make the website as user friendly as possible. One obvious suggestion is to allow consumers to “create” a basket or shopping list of products while navigating the website. In this regard, the website could easily be improved by allowing consumers to “select” products that can be placed in a “basket” or “shopping list” on the website for consumers to print out as a convenient shopping list they can take with them to the supermarket when they go shopping. Consumers could then mark off the products on the printed shopping list as they go along. Cost conscious consumers could even take such a shopping list along when shopping at, say, a Coles or independent supermarket to see if they could get the product at a lower price from Woolworths.
With the Woolworths price check website having a long way to go the onus is now clearly on Woolworths to keep improving the website to a point where it gives consumers full price transparency in a manner that allows them to make the most effective use of the pricing information.
Full pricing transparency from Woolworths, however, is only part of the picture. With Woolworths now publishing an expanded range of prices on its website, it’s essential that Coles moves quickly to also publish its grocery prices online. The ball is certainly in Coles’ court to do better and publish on its website a full list of products and prices at each of its supermarkets. Consumers deserve the full picture from both the major supermarket chains and it’s up to the Federal Government to ensure this happens.
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