Many Australians have lost trust in supermarket pricing, with more consumers now comparing prices between stores before making a purchase.
The Australian Competition and Consumer Commission’s (ACCC) interim report for supermarkets inquiry revealed that almost 50 per cent of consumers now ‘often’ or ‘always’ compare prices before shopping, a significant increase from 17 per cent found by the watchdog’s 2008 Grocery Inquiry.
The interim report outlines the ACCC’s halfway point findings of its year-long inquiry.
“Many consumers have told us that they are losing trust in the sale price claims by supermarkets,” said Mick Keogh, ACCC deputy chair.
“These difficulties reportedly arise from some of the pricing practices of some supermarkets, such as frequent specials, short-term lowered prices, bulk-buy promotions, member-only prices and bundled prices.”
The responses came from 21,481 respondents to the ACCC survey, which is more than any other survey it has conducted.
The ACCC also found that the price of a typical grocery basket has increased by more than 20 per cent in the past five years and that most respondents in low-income households spend more than 20 per cent of their net income on groceries.
The ACCC described Australia’s supermarket industry as an “oligopoly” with Woolworths and Coles accounting for 67 per cent of supermarket retail sales nationwide.
Aldi accounts for 9 per cent and Metcash-supplied independent supermarkets account for 7 per cent.
“Oligopolistic market structures can limit incentives to compete vigorously on price,” said Keogh.
“During the remaining five months of our inquiry we will scrutinise whether, and if so how, the supermarkets may be using market power and the economic implications this has for Australian consumers and suppliers.”
In response to the report, Woolworths maintained its assertion that the supermarket sector is competitive. The company said it would review the ACCC’s findings and provide submissions over the coming months.
“We believe that the Australian grocery sector is competitive, and customers have more choice than ever about where and how they shop,” said Amanda Bardwell, Woolworths Group CEO.
“However, we know that our customers are continuing to face cost-of-living pressures and we remain focused on providing value and doing the right thing by our customers, our team and our suppliers.”
Earlier this month, the ACCC said it filed separate proceedings in the Federal Court against Woolworths and Coles for allegedly misleading customers about the discounted pricing of their products.
