I’ve been shopping at my nearest Coles supermarket for about 5 years. As an increasingly discerning shopper I have become aware of Coles trading tactics and have come to despise them for their gloating greed.
Coles is owned by Wesfarmers, a name which might make you think of green fields, caring custodians of land and livestock. In 1914 when Wesfarmers began as a West Australian farmers co-operative, that may have been true. Now Wesfarmers is one of Australia’s biggest listed companies who own and run Coles, Target, Kmart, Bunnings, Officeworks, coal mines, gas and chemical companies. They’ve pretty much got the domestic dollar spend cornered and covered.
I’m not a consumer expert on any of the other businesses but over the years I have become very clear on how Coles operates. I can only surmise the greed is good mentality and tactics are the general modus operandi for the group. Manufacturers and farmers may spend years and many thousands endeavouring to gain mass market exposure on the shelves of Coles. Finally they are successful and the new product graces the shelves. The customer is excited, the product is successful, the stocks repeatedly sold and in a free market economy there the tale should end with a happy supplier, happy supermarket, happy customer success story . . . a win win for everyone. But no, what happens now is that Coles’ sophisticated stock monitoring systems tag the success of the new brand/product’s success with the consumer and the Coles killing machine takes over. Their in house product experts pull the new product apart until they have worked out how to copy it, the new product is soon no longer available as Coles claim supply difficulties which the manufacturers vigorously deny. After a suitable pause of a month or so while the customer is left wondering what happened, the shelf space is suddenly filled with a Home Brand replica (or attempt at a replica) at a lower price and significantly lower quality.
Not only is the attitude to product developers and manufacturers abhorrent, so too is the disdain and disrespect shown to the customer. The opposition is annihilated, the shelves full of Home Brand and all choice is removed for the consumer. Most of us shop in a hurry and the sad fact is that we all make price based decisions, especially in these uncertain economic times. Coles currently have 3,500 own brand products, and introduced a further 1,000 in 2011. The trend is growing and the only people who can stop it are consumers voting with their hip pockets because if Coles control everything we buy and Australia has poor packaging and labelling laws, where does that leave us? What are we eating, wearing, washing with – do you know?
Now let’s talk about what Coles are doing to farmers. If Coles make a ‘lowest prices guarantee’ to their customers then obviously they are cutting costs to suppliers. Imagine the scenario – you have spent years developing a relationship with Coles in order to get your product to the consumer. You have invested in infrastructure, fertiliser, animals, staff etc based on a price agreement with Coles. Then they turn around and lower the price they are prepared to pay. What can the farmer do? He is absolutely against the wall – the bills, mortgages and loans have to be paid off, he can’t risk saying no, he can’t invest money he doesn’t have in marketing or developing other avenues to the consumer and much of what he produces can’t sit around and wait while he finds a new path. Make no mistake Wesfarmers are screwing the Australian farmer royally in order to break their backs, spirits and ensure there is no Australian farming future. Don’t be fooled by their advertising to the contrary. Take the milk war, first they squeeze the name brand milk suppliers from the shelves by introducing home brand milk, then they slash the prices so the named brands have no hope. And the dairy farmer with his automated processes, huge shedding, fertilizer, grain, staff and diesel bills is forced to work longer, harder to try to make ends meet, to diversify and finally to up sticks and sell up. Who wins? Only Coles, not the average Aussie consumer. Because Coles don’t really care where the food comes from or who will prostitute themselves to their pay less philosophy. The Consumer doesn’t win if the farmer is forced to cut costs and corners to meet Coles pay strictures. This week mushrooms are $6.00 a kilo. Let’s say that means that the farmer gets $3.00 a kilo (I bet he doesn’t!) How could anyone produce a kilo of mushrooms for $3.00 when you factor in labour costs, manure, mushroom spore, straw, heating and diesel. It’s not possible. Bang and another farmer goes to the wall. When all the Australian farmers have walked off the land where will our food come from? Don’t you think the Chinese, Vietnamese, Thais or Indonesians will at some point want to keep their own home grown foodstuffs for their own population boom? Food security, that’s a topic for another day . . .
On the Wesfarmers website it says ‘The primary objective of Wesfarmers is to provide a satisfactory return to its shareholders.’ Not to serve the customer, care for the consumer’s health or assist in marketing a vibrant diversity of products and produce to secure Australia’s sustainable farming future. Remember that when you shop at any of their stores. And are Woolworths any better? Not much, but a little bit. We all need to change our shopping habits and give the big boys the flick.
I have taken this on as my personal challenge and we buy flour and dry ingredients wholesale. We make our own bread, soap, cheese. We grow our own veg. We are growing meat for the freezer. We have our own supply of milk. And in the interim we shop at the greengrocer, the butcher, and very occasionally at the arch enemy of consumerism for a few essentials which I still need to be weaned off (firelighters, chux, washing up liquid) but with every trip we purchase less, we make and grow more and we save money. But more importantly we have the satisfaction of becoming ever more self sufficient and giving the finger to the Coles/Woolworths duopoly which does nothing for good food, good farming or Australia’s food future.
Great read!
Just thought i’d add that they use a strategy called futures to get there produce at the lowest possible price for them. Basically they pay the farmer upfront and then dictate to them what they will grow. This might seem like a good deal for farmers as it lowers risk, but the contract they get put on have so many clauses and conditions that more often then not they end up worse off. Farmers are not lawyers and companies like coles make damn sure there contracts are confusing on purpose. They say go grow pumkins and ill give you 50c a kg guaranteed regardless of market price at harvest. Sounds good right but coles only want the best of the crop and if your crop doesn’t meet there conditions the contract is void. Leaving the farmer out in the cold.
Also it’s worth noting that woolies owns more poker machines than the five biggest casinos in vagas. So while they are “better” its still the better of two evils. Well, thats my opinion anyway.
It’s a sad state of affairs.
I didn’t know that! They’re worse than even I thought. I didn’t know that about Woollies either. Really we all have to be brave enough to take the pledge not to step through their doors and spend our money there and support smaller businesses instead. But it’s a chicken and egg dilemma, because of the duopoly smaller businesses have gone to the wall so in many areas there is no choice. Thanks for educating me!
I too get so annoyed at the way the supermarkets are taking away our option to buy any brand but their own. I shop at Woolworths and I see plenty of it there! I have found that speaking up and making repeated complaints to local management does sometimes make a difference. I just need to make time to do more of it.