Colesworth price gouging?

[kyle]

With all this talk recently, I don't even know if ppl outside of Ozbargain or AFF are doing their shopping right. Compared to someone who goes to say Aldi, I get all my name brands at Colesworth and throw into the mix discounted gift cards, half price offers, loyalty points, bonus points, I don't think I'm paying more. And don't forget there's Amazon too.

What do you think?

 

[Kerrodt]

What’s the question??

 

[Gremlin]

The question is "What do you think?"

I think I'm confused by the OP's post...

 

[kyle]

What’s the question??

The subject line? Are they price gouging?

Post automatically merged: Dec 8, 2023

The question is "What do you think?"

I think I'm confused by the OP's post...

I was just saying, based on my purchase patterns, and the points etc I'm getting as a "discount", are they really price gouging.

 

[Kerrodt]

The subject line? Are they price gouging?

Post automatically merged: Dec 8, 2023

I was just saying, based on my purchase patterns, and the points etc I'm getting as a "discount", are they really price gouging.

Depends on how you define “price gouging”.

You seem to define it by the extras that you get as a tangible incentive vs. shopping somewhere else. Which is fine if that’s what you’re happy with.

I‘d tend to ignore that and look at (a) the trend in operating margins historically of the 2 major supermarkets and their close competitors (Easy to do for WOW and COL. Impossible to do for Aldi), and (b) the trend in operating margins historically of their main supplier and value chain participants (difficult to do as most are not publicly available).

If these trends are going up without good reason then it’s a potential Indicator of possible price gouging.

I don’t consider just an increase in the shelf price as gouging, on its own, as inflation means higher prices all along the value chain to the shelf. Inflation is a fact of life.

Also, as my point (b) above attempts to highlight there are more than just the supermarkets themselves in the value chain who could be guilty of price gouging and not the supermarket themselves.

Once the listed supermarkets release their 1H24 results early next year we should have a good idea of what is going on with margins and how this might answer your question.

 

[kyle]

Depends on how you define “price gouging”.

You seem to define it by the extras that you get as a tangible incentive vs. shopping somewhere else. Which is fine if that’s what you’re happy with.

I‘d tend to ignore that and look at (a) the trend in operating margins historically of the 2 major supermarkets and their close competitors (Easy to do for WOW and COL. Impossible to do for Aldi), and (b) the trend in operating margins historically of their main supplier and value chain participants (difficult to do as most are not publicly available).

If these trends are going up without good reason then it’s a potential Indicator of possible price gouging.

I don’t consider just an increase in the shelf price as gouging, on its own, as inflation means higher prices all along the value chain to the shelf. Inflation is a fact of life.

Also, as my point (b) above attempts to highlight there are more than just the supermarkets themselves in the value chain who could be guilty of price gouging and not the supermarket themselves.

Once the listed supermarkets release their 1H24 results early next year we should have a good idea of what is going on with margins and how this might answer your question.

Yes I agree with the analysis on the margins. Based on the current debate happening in the media, price gouging only seems to refer to an big jump in prices.

 

[Kerrodt]

Yes I agree with the analysis on the margins. Based on the current debate happening in the media, price gouging only seems to refer to a big jump in prices.

Yeah I agree. And it is somewhat uninformed and most likely designed to generate clicks and views. I’m pretty sure that the two majors would be well aware of the consequences on being perceived to be price gougers - nothing positive would come of it that’s for sure.

 

[oz_mark]

While I think there are instances where prices are higher than they should be, it's hard to work out where in the supply chain it is happening.

 

[SYD]

Whenever you’re looking for “value” it’s essential to know what the normal price for something is to start with. eg keeping an eye out for a good airfare sale, it’s important to know what the usual price is.

For groceries, yes I’ll buy things I see on special from Coles and Woolies - if I know it’s actually a real discount and not some inflated normal price and the sale price (that’s actually not as common as some heat up shows would suggest).

I do find that the Woolies bonus points offers are rarely on sale - so you are paying full price for those points.

The spend $X for Y weeks promos are better because you can do your normal shop including things on special (and maybe stock up on razor blades…).

 

[snabbu]

As mentioned above if you know the regular price for items, it's easy to know what represents value for money and what does not.

 

[Kerrodt]

As mentioned above if you know the regular price for items, it's easy to know what represents value for money and what does not.

Agree. But IMO that doesn’t support whether the retailer is gouging or not.

 

[dajop]

I get all my name brands at Colesworth and throw into the mix discounted gift cards, half price offers, loyalty points, bonus points, I don't think I'm paying more.

And therein lies the issue. Most people don't have the time, the knowledge or the interest to invest in the various smokes and mirrors they employ. The cost of everything you talk about is built into their pricing strategies, which probably means unless you are prepared to invest in the time to understand and take advantage of these marketing tools, then it might cost more. Aldi by contrast probably offers simplicity and straightforward WYSIWYG pricing, rather than the complicated marketing strategies that Colesworthe employs.

 

[snabbu]

Agree. But IMO that doesn’t support whether the retailer is gouging or not.

Agree. I would assume Colesworth are price gouging on certain products just because they can. This is where knowing what the regular price is on an item negates the "gouging" - just don't buy it if you think it's overpriced, or look elsewhere.

 

[Gremlin]

I've just given up trying to find an article I read earlier in the week, probably paywalled anyway, that talked about how, since inflation took hold, that supermarkets in Europe have had their margins significantly contract. Those in UK have contracted. The US - contracted.

Australia/NZ on the other hand was the only major market where supermarkets were bucking the trend.

 

[kangarooflyer88]

A big issue I think most Aussies don't realize is that we're on an island. A big one yes, but an island, nonetheless. Consequently things like produce, meat, etc. are depend on local conditions. Contrast that with other markets like the EU, North America, etc. where they are isolated from supply shocks. For instance, in Canada I could get most fruits and vegetables all year long. Sure, in the winter a lot of the produce would come from Mexico or the Caribbean. I would encourage anyone to try getting fresh produce in the winter - the choices are limited and the prices are eye watering. For instance, try buying plums or nectarines in the winter. At my local grocery store, it was $30/kg. I could literally fly to the US, pack a couple of suit cases of nectarines and come back and still be ahead of this.

-RooFlyer88

 

[dajop]

I could literally fly to the US, pack a couple of suit cases of nectarines and come back and still be ahead of this.

Umm not really as you would have to throw the said nectarines out on arrival.

 

[kangarooflyer88]

Umm not really as you would have to throw the said nectarines out on arrival.

Chuck it in a diplomatic bag!

 

[Melburnian1]

I would encourage anyone to try getting fresh produce in the winter - the choices are limited and the prices are eye watering. For instance, try buying plums or nectarines in the winter. At my local grocery store, it was $30/kg.

By buying items locally grown that are in season, we enjoy them at their peak.

In some nations overseas, I've found poor availability year round of a range of fruit and vegetables. The nation that I recall as worst was surprisingly South Korea.

Travel four hours south by air to Philippines and the contrast is amazing: the latter has an excellent range of fruit and veggies year round.

 

[docjames]

The price gouging claims are interesting given operating margin for both the red and the green remains the same as it has been for over a decade - in the 2-3% range.

Huge amount of capital deployed and huge employers and only a 2-3% margin.

There’s plenty of other industries that should be looked at for price gouging, but like the banks, they are a political target.

 

[SYD]

The price gouging claims are interesting given operating margin for both the red and the green remains the same as it has been for over a decade - in the 2-3% range.

Huge amount of capital deployed and huge employers and only a 2-3% margin.

There’s plenty of other industries that should be looked at for price gouging, but like the banks, they are a political target.

There’s an article in the SMH / Age today along similar lines (but broader ASX companies).