Blast from the past series – Originally posted 3-September-2007. That was over 10 years ago and it still applies in 2021 and I have updated the post to reflect this. The original post is at the end!
First let me say that every company is entitled to make a profit. Profits help companies grow and develop better products. In turn employs more people and feeds the economy. However when they make profits because they’ve got no competition and don’t do those key then I don’t think that’s very fair. I especially think this applies to supermarkets and their petrol partners.
Government’s especially the current one don’t live in the real world (In 2007 it was the Howard Liberal National parties). They don’t see the obvious things like biscuit prices increasing by $1.00 over the course of a year. The biscuit company didn’t make a massive profit, instead the supermarket chain makes a huge profit.
The $1 milk war of the day was another example of supermarkets ripping customers and the framers off. The milk was cheap because it was and is lower quality product and they hope consumers don’t notice. They didn’t say that in the beginning so marketing spin could say that the farmers were ripping you off but clearly that tactic failed. They tried to claim the high ground that it allows the poor to survive but that’s that marketing spin purely because it is -I repeat a lower quality product. That’s why people are turning off milk altogether.
Speaking of which their failed attempt to bury the milk farmers and their groups, Coles in particular blame the processors, which are milk brands themselves which are usually owned by the farmers. After further research, Coles in particular don’t actually pay all that much to the processors or milk brands and instead they pay them to stock their brands on the shelves. As a result Coles is the still the rip off merchant with no cost outlay but marketing and all the profits. It is a cut throat way of burying famers, industry and customer alike with little ethical or forward planning.
Rip off? More so when they enter the fuel market they and promote their brand by shopper dockets or coupons a trend starts to form don’t you? Sell cheap low end food then supposedly cheap lower end petrol. Shell understands but clearly their management is ignorant that people start to notice. It is not an ethical way of doing business as there is no benefit to anyone with just accounting profits not new jobs or services just marketing spin.
There is better way, the way it was before – with decent profits, jobs and competition for everyone not just the big brands. It may seem inefficient in terms of accounting or big business but there was mix of different owners whose success was based on better fuel, service and price. Proven by the fact that petrol prices aren’t being reduced by larger volumes.
I have to qualify the statement by adding that I don’t mean franchised fuel stations – as Franchise owners in Australia have a poor record of treating Franchisees poorly. Search the stories specifically on the Gloria Jeans Franchise aka RFG, Carltex disputes as a starter.
Back to the biscuit story: Supermarkets brands say NO we aren’t ripping you off. Price rise is fair they say. Yet we see no end to the substitution of well known brands with ‘supermarket owned brands’ made in cheapest country and ingredients possible. They tell the original manufacturers that unless they pay them to stock their products they will use their own brands in prime shelf locations. For example – how can importing dough for bread be cheaper than buying it locally since all the key ingredients are grown here?
The conclusion is that the supermarkets are quite short sighted and will paint themselves into a corner of selling only low end groceries and where the real profits and premium brand image of higher quality products migrate to – say the internet. Is Government intervention required to correct this greed?
ORIGINAL POST : 3 September 2007
First let me say that every company is entitled to make a decent profit. However when they make profits because they’ve got no competition then I don’t think that’s very fair. I especially think this applies to petrol companies and their supermarket partners.
Government’s especially the current one don’t live in the real world. They don’t see the obvious like biscuit prices increasing by $1.00 over the course of a year. The biscuit company didn’t make a massive profit, instead the supermarket chain makes a huge profit. More so when they enter the fuel market they and promote their brand by shopper dockets or coupons then I start to see a trend don’t you?
Supermarkets say NO we aren’t ripping you off – see our accounts! Done by a reputable accounting firm. Sorry guys – every decent accountant knows what goes into the figures – I’m not going to reveal the secrets yet. You see official government inquiries don’t examine the making of the books just the results they don’t do the practical thing. So nothing will result unless the right thing is done and ignore the figures.
Then they get experts to justify whatever they want – pity the experts are all theory and only good in one particular area and miss the whole point.
Like the post on Telstra with their dubious reception figures – Telstra says look at our recorded measurements we cover soooo much of the country we can stop the old network. Then a group does the right thing and tries to make a phone call and guess what it doesn’t work. Then the Telstra PR kicks in saying the group that did the test was totally STUPID and they don’t know what they are talking about. The group are customers – opps! Telstra then blames the phone manufacturer still denying there’s a coverage problem.