Who but the supermarkets in the case of groceries? The producers reportedly are not seeing similarly huge increases in profits.
OTOH at the end of the investigation other than another round of advising us consumers to ‘shop around for the best deals’ what powers does government have in any case. Naming and shaming Colesworths (as an example) would likely result in their adopting another strategy to game the system.
I got some historical insight into governments’ love of business watching
Despite time moving on there seems to be a locked in view that businesses ‘saved the bacon and the nation’ once, will do so forever, and thus should be able to do what it wants. Even if the former was the case, should the latter be an unchallenged follow-on?
I am sure you have read the claims but are on record more than once discounting them as you see it. Absolute profits in themselves are not as important as the margins that deliver them, so there is much unknown.
It should be added that since COVID there are additional costs such as more cleaning, wipes for trolleys, higher power bills, and so on, all absorbed into the turnover, and profits are up.
While some data may be missing the figures show very little growth in both EBIT and EBITDA for 2023 for both groups. Some figures vary widely over the past 5 years. For WOW, EPS (Earning per share) are much lower in 2023 than 2022 (2022 had EPS over 200%). EPS for WES is more stable than WOW.
It is hard to pull Supermarket data from these earnings and costs as there are multiple underlying businesses that can affect the profitability of the parent company. A flat growth as seen in the second graph you supplied is possibly not a real reflection of just the Supermarket section of WOW.
Thanks for posting, this is an interesting response by government. Any new funds to Choice by any means and for any purpose has to be a good thing, but it just reinforces that to get anything done, you have to make your issue political. The implication is that Choice recognises it hasn’t done enough on this front to date, I wonder who approached who with the idea?
It will also be interesting to see how such an obvious buck pass gets handled and implemented by Choice.
Anyway let’s hope that monopolistic and manipulative marketing tactics get some proper attention… non-competitive pricing, non-comparable and missing unit pricing, fake discounts etc… all OK under free market principles but all requiring government intervention to resolve, since groceries are not a free market.
No question data is opaque enough to make any absolute conclusion.
A simplistic scan of data points over the last 2 years show sales are up 5.6% at Woolies and EBIT up 8.75% while gross income is down 4.8% but net income is up 4.6%.
I don’t think it implies what you have suggested. CHOICE I’m sure would like to do more, that is not an implication that CHOICE believes it hasn’t done enough. This funding should enable CHOICE to expand it’s budget to do more.
Not being privy to Government to business discussions I can’t even begin to determine who asked who, from the PM’s release it would appear that it was a Government approach rather than the opposite. Would CHOICE had some discussions about prices and similar? I am sure they would have done so, particularly with the ACCC as they have a special consumer organisation ability to make a “Super Complaint”.
Some examples of complaints made by CHOICE (one of them about Coles)
For anyone interested in submissions, complaints made , and reports the following link is to the CHOICE policy archive section
Choice are a consumer organization. Representing the ‘end user’.
ACCC are not involved in end user issues. They are looking at the Corporate level for collusion, price fixing, cartel behaviour, and the ACL at a wide level.
There are always differing views across the community as to how well the ACCC performs. One only needs to look to the history of successful actions - enforceable undertakings agreed to (by court order where required) to find evidence of direct consumer benefit. IE involvement in end user issues.
Bedtime reading for insomniacs. The first 3 pages should suffice for those looking for an early night.
Never confuse ‘consumers’ as a class against ‘a consumer’ (aka individual end user issue) which I interpreted as the context. The ACCC does not get involved in individual consumers’ issues although their state reps do.
It is possible to help consumers as a class and ignore seriously bad experiences affecting an individual consumer. Per the report, the aggregated numbers can mislead, especially if you are ‘one who was not served’.
The ACCC quite clearly outline this non individual complaint resolution approach.
“ The ACCC is not a complaint handling body. We rarely become involved in individual consumer or small business disputes. We are unlikely to pursue matters that:
are one-off, isolated events, unless the conduct involves wider implications for competition or consumers
are more appropriately resolved directly between the parties
are solely for the purpose of obtaining redress for consumers or small businesses
involve consumer issues more effectively dealt with at the local level by state and territory agencies (for example, activity that occurs within a single state or territory, or complaints that may be resolved by way of individual dispute resolution)
are better considered by industry specific regulators that have the regulatory focus and expertise to properly assess the issue
are primarily contractual or private right disputes (the Act provides complainants with a private right of action in these circumstances).”
The funding for the CHOICE part of the announcement made by the Proime Minister was also disclosed in the article
"On that front, the $1.1 million in taxpayer funding for Choice to deliver tailored advice for consumers about prices could prove to be the biggest immediate benefit for shoppers.
The funding will allow the consumer group to compare grocery prices at different chains, and highlight those that are charging most and least for comparable products."
I hope the $1.1 million is enough, no idea of the length of time this grant/funding is supposed to cover.
"In addition, the Government will deliver $1.1 million to respected consumer group CHOICE to provide price transparency and comparison reports on a quarterly basis for three years.
Starting from the second quarter of 2024, CHOICE will provide shoppers with better information on the comparative costs of grocery goods at different retailers, highlighting those charging the most and the least.
The provision of this information will empower Australian consumers to make informed choices about food and grocery purchases."
This Fin Year will be another hard to decipher result for Woolworths supermarkets as part of the Woolworths group. Their profit as a group will be down by about NZ$1.6 billion (just a tad lower than US$1 billion and AU$1.5 billion) after a write off by the Group from their NZ business. The write off was of a non tangible asset, Goodwill, so just a purely paper loss not an operational loss from say cost of goods sold, or revenue… So any profit they made this year may disappear or not be as impactful to a viewer in the Group results for this year, Useful process for the Group to do so in light of the inquiry? I can’t say but my feeling is that it may not have been timely coincidence, but that is just my feeling and has no basis in known fact.
As the Woolworhs supermarkets are doing much of the profit lifting against the under-performing NZ market and BigW’s material losses, the Group expected increase of around 3.2% would reflect around a 6% to 7% (maybe more depending on the other losses) lift in the Australian Supermarkets profit taking.
Our duopoly is also evolving to replace inner city groceries with ‘metro’ stores. The ‘metro’ concept is rife in other countries and is a good bet to improve profits. Less stock, smaller ranges, higher prices, and less service focusing on convenience products for the business people/workers, to the detriment of inner city residents.
