This report marks the midpoint of a comprehensive year-long investigation initiated by Prime Minister Anthony Albanese in January, aimed at assessing the market power of these retail giants and any barriers new competitors may face.
As part of its inquiry, the ACCC engaged with over 21,000 customers, who expressed rising concerns about escalating prices and the challenges of identifying the best deals on products. Many respondents conveyed distrust towards advertised sale prices and voiced apprehension regarding loyalty programs, fearing potential penalties for not participating.
This scrutiny follows a previous investigation into deceptive discount claims which culminated in legal action against two retailers. Mick Keogh, the ACCC’s deputy chair, highlighted that numerous issues have emerged from consumer and supplier feedback during the inquiry thus far. Concerns raised include high prices, excessive profit margins, and confusing pricing structures that leave consumers feeling misled.
Additionally, suppliers have pointed out unfair contracting practices, expressing concerns over risk transfer and inconsistent contract terms that undermine their negotiating power. As the investigation progresses, the ACCC plans to delve deeper into these matters, leveraging a wealth of data gathered from the supermarkets.
Consumer dissatisfaction has catalysed legal action against Australia’s leading grocery chains. Survey results from the ACCC indicate that many low-income households are spending over 20 per cent of their net income on groceries, highlighting the financial strain faced by a significant portion of the population. The report found that the average grocery bill has surged by more than 20 per cent over the past five years, a figure that aligns with general inflation trends.
Keogh noted that while food price inflation in Australia is relatively lower than in most OECD countries, the inquiry will closely examine whether the market power held by these supermarkets contributes to increased consumer prices or adversely affects supplier pricing.
The ACCC has shared its findings with the federal government, detailing the next steps in the investigation, which will continue for another five months. During this period, the focus will be on understanding how, if at all, the market dominance of Coles and Woolworths impacts both consumers and suppliers.
As public scrutiny into Australian supermarkets intensifies, the outcomes of this inquiry could lead to significant changes in the Australian supermarket landscape, as well as restoring consumer confidence in the retail sector.
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