Blog 18th Anniversary: The Duopoly of Australian Supermarkets

 The duopoly of supermarkets continues across Australia, as corporate muscles are flexed against suppliers, staff and customers in a relentless obsession of growth in profits, dominance and control. 

I support more of stand alone independent grocers and direct producers, they have more variety on their shelves.  As prices in Coles and Woolies have gone up, they cannot compete price wise with some independent grocers, especially ethnic ones like Italian, Spanish, Chinese, Vietnamese, Indian, etc. 

My strategy now is to be mindful of selected items of grocery to buy - and suppport small business in my locality as far as I can. A more focused approach helps to avoid wasting expenses on addictive food, zoom for more quality in edibles and exercise our minds and hearts in better choices with discretion. 

Fresh eggs are not bad at Aldi, they do not shelf them in fridges like Coles and Woolies. Fresh milk at Aldis is a good buy, but at the same time there can be a lot of distracting products at Aldi outlets. 

More distracting is the preponderance of products laden with sugar, salt, preservatives and fat at the main supermarkets.  Do walk the aisles and make up your own mind. 

If one resides in an Australian regional area, I understand there can be a lack of choice -  and one depends more on the duopoly. 

This is echoed in the lack of competition especially in the Australian sectors of domestic air travel, pharmacies and banking. 

Fresh produce markets are fascinating to me, but generally since Covid, prices have spiked at such stalls, even if quality is maintained. 

I have also dabbled in ordering online offers of groceries and white goods - some provide free  and next day delivery at the very latest.

The physical store model is increasingly under threat - the way some businesses are treating customers is viewed in disdain by more people I know. 

Need we visit a supermarket venue to get essential food?  We step in such places and we observe some using them for social chats.  We also note the rise in self managed check outs with narrow spaces.  Cameras are attached to monitor the movement of human beings.

Pyschological games are played with posters put up by the supermarket to induce us to buy, but which underestimate our level of intelligence. 

Do reflect on the huge numbers of real estate such supermarkets sit on, they can easily get into the commercial property game once they stop selling food. 

There has truly been this relentless drive to know what you and each family have bought in the past to shape millions of purchasing profiles.   The underlying rationale is that once you buy something, you will buy it again.   This model excludes the very possible human trait of not purchasing the same thing ever again - and the right to have a significant change in taste. 

The use of membership cards implies the giving of peanut reward points to customers. 

The duopoly puts its bets on greater convenience, habitual pattern of spending and lack of competition for the majority of the population to

regularly visit its outlets.  They are also experts in marketing, human behaviour and commercial practices.   

#yongkevthoughts

Becoming A Customer

 Human pyschology in approaching purchases - a deal, a package, a commitment, an arrangement or a perceived need - can be fascinating, bewildering or just being held captive.

Try assessing whether you would enter into the following product arrangement.

1.    You pay upfront in money for a promise of services.

2.     The annual charges increase every financial or calender year - and will definitely be charged more if we had breached some detailed promise on our part.

3.     You are asked to disclose personal details of yourself, your lifestyle and your movements before the product is sold to you.
There is no guarantee your privacy is protected in practice in the data base of such providers.

4.    Legislation makes it compulsory for you, your entity or business to have  or require the product.

5.  The people, software robot or website interface you deal with, after buying the product, have a different personality or customer interactive approach after you buy from them.

6.    The contract for such products is purposefully made complex, utilises legalise and high sounding technical terms and has so many pages that turns off most customers from ever reading it.

7.     There have been rogue players in the product sector that you want to deal with.  Gross breaches of contract, uncivil behaviour and unexplained penalties have been landmarks of such providers.

8.    Authorities and governments have declared such providers as too big to fail.

9.    Such providers often hold us as captives by luring us with peanuts and diversions as earning points, making us buy things we do not need and make us wait for a long time before we can claim our membership rewards.   The common thread in such provider programs are getting us to be involved in churning of transactions that add volume and margin to their business.

10.    Promises of payback, claims and refunds of our upfront financial payments are laced with conditions, percentages ans administrative splitting of hairs.

#yongkevthoughts

A Mostly Unpleasant Encounter

 Some People Will Never Change.

There is this restaurant by the sea.
It offers dishes for which it charges diners more than a bit, especially since Covid began.

Recently a couple, whom I know well, had a meal there. The wife ordered Barramundi. When she was served, she took a first bite and sensed something was not right. The fish served was flaky, most likely an indication of the seafood being not fresh.

When the wife let a wait staff know, the latter, right in front of the diners, took a bite of the Barramundi as well from the plate, as if not trusting what the customer said.  Only then did the staff take away the flaky fish.

The wife then only had her plate re-served.

When the husband went to pay the bill, this couple was charged with two serves of the 50 dollar Barramundi dish. 

Many other friends had also experienced similar treatment at this same restaurant.  It does not seem to be a one-off.

So what can we learn from.the antics observed at this restaurant?

There is a lack of finesse and attention to detail at this restaurant.
Staff employed never seem to learn, dwelling in a world of their own.

When a restaurant charges upmarket prices, the onus on them is to deliver better and treat customers on a more ethical basis.

Have you come across such self centeredness in people or businesses you deal with, whether as a customer, volunteer, donor, supporter or worker.

When diners at that restaurant make time and effort to let staff know of the problem, it is also because they want to continue supporting that restaurant.

The diners do not want to hear
excuses, only hoping for the
restaurant and staff to earnestly make things better - and not inflict the same negative experience on others.

What is it they say, you can try to lead a horse to water, but not make it drink.

In such circumstances, I have never gone back to patronise that restaurant, when they have been patronising to me and other diners.
Let my time, effort and funds be utilised for better causes.

Customers can see through pretense, lack of courtesy and sub standard service.

Some People Will Never Change.

#yongkevthoughts

Churning For More Business

Churn, more than ever, continues to be the source of business profit and drive in contemporary society.

Turnover of paying customers to one's books means showing an increased customer portfolio, no matter how temporary this increase can be.  Inducing them to use your services or buying your products can mean offering some interim concession, creating some excitement in the joining experience or differentiating your offer from your competitors.

This can be in passing on discounts in prices or rates. It may be linking access to frequent flyer rewards, providing nicely packaged gifts or increasing credit card points. In the past, this was reinforced by hiring a team of effective communicators in person or in adverts to push the package. It is sad these days that many on line offers involve interacting with just software - something is lost in this process but business costs are reduced and a new rising generation of potential customers may prefer it this way.

In having a high churn, shareholders and business owners are pleased to receive the eventual outcome, that is profit margin multiplied by the number of transactions. What simple common sense this can be. What has been neglected inevitably is that once a customer opts in, the level of engagement and service from the business invariably declines.

Once you lock in with an insurance policy, wealth management product or gym membership, do you feel increasingly neglected?   However, if a customer actively changes providers for utilities, telecommunications and subscription services, the incumbents may chase you intensely like forsaken lovers with emerging inducements you were not told of before.

It is all a game as old as human history. Commerce used to make profits on a single transaction, but today's financial markets thrive on benefiting sellers with trailing commissions as if they possessed imtellectual property.  Hence we are not surprised that in unethical cases, fees are still charged long after the initial primary transaction.

Churn can be seen in the frenetic reporting by media of even small changes in prices, whether of currency, options or man made instruments. Churn is the vitality of gambling, churn can be creating value out of nothing at all. Churn thrives on sentiment, speculation and movement. Churn is betting on change and making money out of it. The fast paced and more responsive internet enables the better managing of faster and larger transaction universes. The day trader is only a simple example of the utilisation of churn, which underlies all the financial centres of this world.

To the ordinary individual, better managing churn is the key to better purchasing decisions. The seller need not have a monopoly on making a buck out of churning. It is all a game beyond haggling and bargaining. Understand why sellers like churning.

#yongkevthoughts