Thursday, May 31, 2012

How Many Supermarkets Does a Town Need?

There was big excitement in town this week. There hasn't been such a buzz since our one and only set of traffic lights were installed many years ago.
A new shopping complex has opened incorporating a Woolworths supermarket and their liquor store plus a Country Target and ten other specialty shops. And the building has the town's first lifts and travelators!

But how many supermarkets does a town of 10,000 people need?
Ok, the population trebles for a few weeks over the summer Christmas holidays and at Easter but hardly a sustainable market for five supermarkets you would think.
But obviously better brains than mine have nutted this all out.
We already have a Coles, an Aldi and two IGAs, not to mention a few smaller IGAs in outlying villages.
Woolworths have an Australian grocery market share of about 43% followed by Coles 37%, IGA 15% and Aldi 3%.
The new Woolies store is certainly bright, sparkly and was well patronized. A quick trip through their liquor store failed to find any bargains however.

Back at Coles, our normal food source, the car park was nearly empty as was the store.
Only one check out lane plus the self checkouts were open. Normally at that time of the day it's very busy. The check out chick said they had taken 'a big hit' since the new store opened but was sure that customers would return once the novelty wore off. We remained 'loyal' to take advantage of the substantial discount Coles were offering to make purchases over a certain amount on a weekly basis over a month. This was obviously their counter to the new store.

I like IGA stores. They are not large, have a friendly staff but their prices are way and above what you can get at Coles and now, I suspect, Woolworths. Their liquor store is marvelous (the manager is a wine buff) but prices are again prohibitive. It is much cheaper to order wine from suppliers on line.
We only use them for the 'forgotten items' when passing by.
Aldi is a German company and has the reputation for 'cheap'.
And they are!
The only problem as far as I am concerned is that they don't have brands you can recognize. Sure the vast majority of their products are Australian made, probably under contract by well known producers but am not willing to take the risk on the quality. They also sell liquor, some at ridiculous prices. A $3 white wine anyone?
The other downside is there is always a huge queue at the checkouts due to low staffing levels which is part of their cost savings. And they make you bag/box your own purchases. We only use them to get a supply of German goodies at Christmas time.

So it will be interesting to see how all this pans out.
When Coles moved into town, a lot of small local businesses like butchers, bakeries and fruit shops went to the wall.
The corporate line is that a lot of new employment will be created. But there is only so much patronage to go around. Surely job gains in one area will mean losses in another.
The other sleeping giant is Costco. They have opened up stores in the east coast capital cities and are seemingly doing well. But I think they are way too big for our town.
Stay tuned for further episodes of "Supermarket Wars".

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