The loyalty tax shoppers willingly pay despite push for supermarket competition
The loyalty tax shoppers willingly pay despite push for supermarket competition
The ACCC's supermarket inquiry has shone a spotlight on Coles and Woolworths' high prices. But 76 per cent of shoppers still head to either store for their primary grocery shop.
The ACCC's supermarket inquiry has shone a spotlight on Coles and Woolworths' high prices. But 76 per cent of shoppers still head to either store for their primary grocery shop.
Aldi has again beaten Coles and Woolworths in a government-funded shopping basket comparison.
Consumer advocacy group Choice released the results as part of its quarterly survey, sending mystery shoppers to 104 stores across the country in September.
Here is a breakdown of the costs between Aldi, Coles, Woolies and IGA (without specials) from its most recent report:
- Aldi: $50.63
- Coles: $67.90
- Woolworths: $69.29
- IGA: $77.57
I don't pay a loyalty tax i pay a remote tax and a monopoly tax.
There are two coles in my town over the road from each other.
No aldi for 4000kms
A couple iga
And two Woolworths on either side of town.
Loyalty my arse, go run a map of 'loyal' colesworth shoppers and overlay that with competing store availability
If Joe's Emporium of Essentials opened tomorrow with the same range as Colesworth, but cheaper prices, watch that "loyalty" disappear overnight. The duopoly have reached a comfortable equilibrium and know that so long as they remain cheaper than IGA, they're good to extort us.
Did we read the same article?
In areas where three or four of the major supermarkets have a presence, Coles or Woolies (or both) are still dominant.
In other words, there are options but consumers aren't taking them.
As others have pointed out, the issue is stock range.
No worries, I'll go into the Aldi near me in Tasmania.. Oh, wait....
These are real estate companies as much as retailers. Location is important. I can ride a bike to Woollies and IGA. It is a 40km round trip to Aldi. The savings aren't enough to cover the inconvenience, petrol and vehicle maintenance.
I went to Aldi yesterday and they do really good prices with the limited options the my had. Example.
Sea salt chips big bag:
- Woolies: on special from $6 down to $3.60
- Aldi: always $2.99
So they do better than the half price specials at the majors.
The argument that consumers are paying a "loyalty tax" in a cost of living crisis is absurd. From the article, this is the only reason:
Aldi stocks about 1,800 products compared to the 25,000 sold by its big competitors.
To say ALDI is a competitor to Colesworth is misleading. It's a supplementary option at best, just like going to a grocer or market is. The range just isn't there.
The range just isn't there.
Apart from a few name brand food items, they generally only stock one type of item. So you don't have 5 different types of alfoil you can buy, but you can still buy alfoil.
Most people who shop at ALDI also shop at Coles/Woolies to get the items they can't get at ALDI. It's not a brand thing, it's that they don't sell the type of item you're after at all. As an example, try finding canned mackerel fillets or vegetarian fake meat products at ALDI. They don't stock them.
And for most products for most people, that's fine. But for some products, many people will have a genuine preference for the name brand. And it only takes one or two of those before the inconvenience of going to two different shops will lead people to going to Colesworth instead. The same reason people tend not to go to separate grocers, delis, and butchers.
For example, these days my usual breakfast is Vita Brits. I prefer them over Weet-Bix because they are lower in sugar. A quick look at Choice backs me up on this, with neither Weet-Bix nor the Aldi alternative appearing in their low sugar or low salt best-of list. (Though apparently I could switch to the Woolworths homebrand product.)
A while ago, my go-to was Cornflakes. Health was less of a concern there than texture and taste. And I did try the Aldi product once, and it was frankly terrible.
For other people it might be a children's snack/lolly. Or a particular washing powder/liquid/tablet. Or a particular variety of a particular fruit. But people are time poor, and a lot of people won't go to two places if they can get everything they need from one place.
Yep, the difference between product range is small while the difference in branded product range is huge.