Rising Profits Spark Debate on Supermarket Dominance in Australia

Vivienne Mitchell’s brief TikTok video conveys a powerful message that has garnered widespread attention.

Highlighting the economic disparities, she notes in her video, “In Australia, some have to work for two hours to buy an eight-pack of razors.” She contrasts this with a subsequent clip of the razors priced at $10 in a different store.

With over 1.7 million views since its July posting, the video’s popularity surged as people voiced their frustrations on social media following the announcement of massive yearly profits by major supermarkets.

Miss Mitchell expressed her astonishment on the high costs of essential items like razors. She mentioned that the outrage stems from not just low-income families but also middle-income earners who are now feeling the pinch.

She later shared another video comparing prices of four items — moisturiser, dishwasher tablets, shampoo, and sunscreen. She showed that by opting for discount stores and online shops, she saved a considerable amount.

Many similar posts on TikTok, Instagram, and Facebook criticise the high prices and urge consumers to boycott the leading supermarkets.

Miss Mitchell shared, “Budgeting-focused Facebook groups frequently have posts where people lament about getting little value for their money.”

Gary Mortimer, a researcher from Queensland University of Technology, wasn’t surprised by the uproar. He noted that increased food prices combined with the revelation of these vast profits can be hard for many to accept. Using Coles’ $1.06 billion profit as an illustration, he emphasised the context, likening it to children making a small profit from a lemonade stand after considering all expenses.

A Roy Morgan survey up to June 2023 declared Woolworths as Australia’s most trusted brand, with Coles close behind. Professor Mortimer commented that while the public is critical of major corporations, they would likely prefer a profitable company for their needs.

Addressing the concerns, Coles and Woolworths both acknowledged the financial strain on their customers. Coles mentioned recent price reductions on staple products, and Woolworths highlighted its efforts to offer special deals and price cuts.

Despite the perceived dominance of Coles and Woolworths, which together control 65.5% of Australia’s supermarket sector, alternatives like Aldi, IGA, Costco, Foodworks, and Amazon Australia are also present. Mortimer believes labelling the situation a “duopoly” might be overstated given the variety of choices available. However, he concedes most consumers stick to their regular stores out of habit.

On the other hand, Mitchell argues that many rural areas lack such choices, emphasising that true competition is scarce. She believes government intervention might be necessary.

The Greens in Victoria have advocated for an inquiry into food affordability and the dominance of Coles and Woolworths. Their survey showed that food prices significantly impact the general populace. The Victorian government, however, believes competition policy should be federally regulated.

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