Fred Harrison, CEO of Ritchies supermarkets, has struggled to expand his chain, opening only two new stores in the past decade. His growth plans have been repeatedly hindered, particularly as competition regulators have failed to address ‘land banking’.
Harrison argues that securing undeveloped ‘greenfield’ sites is nearly impossible for independent chains. He cites a recent attempt to establish a new store in Victoria, which collapsed after interference from a major supermarket.
Expressing frustration, Harrison criticised the Australian Competition & Consumer Commission’s (ACCC) year-long inquiry into the $120 billion supermarket industry. While the report made strong recommendations on price transparency and supplier fairness, it overlooked key barriers preventing independent retailers from competing with Woolworths and Coles.
He was particularly disappointed that land banking—the practice of buying land and leaving it undeveloped to block competition—was not addressed. Instead, the ACCC focused on reducing red tape, which Harrison fears will only make it easier for Woolworths and Coles to expand unchecked.
Harrison believes there should be greater scrutiny before supermarket giants gain approval to open new sites. He questioned the need for additional stores when existing ones are already in close proximity, arguing that the issue remains unaddressed, allowing the big chains to continue unchecked expansion.
The ACCC’s 441-page report recommended improvements in pricing transparency for consumers and stronger supplier contracts, particularly for fresh produce growers, to level the playing field against dominant retailers.
One key recommendation urged governments to simplify and standardise planning and zoning laws to reduce barriers for new competitors. The ACCC stated that streamlining these laws would make it easier for all supermarket operators to expand.
But Harrison remained unimpressed, arguing that the report ignored land banking. He warned that Woolworths and Coles could continue acquiring land and keeping it vacant to stifle competition. Independent supermarkets, he said, face significant risks when trying to open new stores if there’s a chance a major chain will open nearby soon after.
Ritchies’ struggles highlight these challenges. The company has managed to open only two greenfield sites in ten years, illustrating how difficult it is for smaller players to secure new locations.
Both Woolworths and Coles have denied engaging in land banking, despite evidence presented during last year’s Senate inquiry and ACCC hearings.
The ACCC’s final report found that the two supermarket giants collectively hold over 150 undeveloped sites for future stores. However, the regulator noted that there are various reasons why sites may remain unused for long periods.
Assessing whether a land acquisition is anti-competitive requires detailed case-by-case analysis, the report stated, considering factors such as the distance to rival supermarkets, local consumer demand, population growth, and the availability of alternative locations.
Despite this, the findings underscored the need for the ACCC to have greater oversight of acquisitions by the dominant supermarket chains. Since 2019, Coles and Woolworths have acquired approximately 260 sites, raising further concerns about their market control.
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