*The playing field is massively tilted in their favour.*

Not really, Poirot. The game is changing. Aldi now have 300 stores, 4 billion turnover and are about to add 60 WA stores and 50 SA stores.

They represent a whole new ball game. Discount everything to the bone. Globally Aldi are owned by one of the world's richest families, with 8000 stores.

It was actually Aldi who started the milk discount wars.

o sung wu, you are not alone in your way of thinking, and the really scary part about this is just how fast we have gone from the penthouse to the outhouse, courtesy of this incompitent government, who, by the way, think a seat on the UN is far more important than the caring of their own citizens.

Good questions rehctub,

I personally think the rot started in 1984 when GJ Coles was allowed to acquire Myer Stores. Their main supermarket rival Woolworths then reacted and they too started on the acquisition trail. Ladies fashion, fast food and fuel outlets all became fair game and today they own between them about 75% of all retail transactions.

I think the biggest problem has been allowing these giants to move their ownership back up the supply chain. One example is milk. Coles grew its volume of milk from Victorian dairies to beyond 40%. Initially good for the dairy farmers but they soon became captive suppliers.

With the help of Lindsey Fox (then a board member at Coles), they moved back up the supply chain to transport distribution from the farm gate, then the dairies and then the farms. They no longer had to generate profit from the supply chain and instead used their power to discount at store level. This is the pattern they use today.

The “loss leader” concept has now been replaced with finite calculations of margin control within the stores (Gross Margin Return on Investment per square meter of floor space). Through this mechanism they are able to “shift” margin in response to both competitive activity and profit opportunities.

They all now use massive computer power to analyze transaction level data and to shift this margin control overnight. That’s how they get the customer to pay for their own discounts.

The fuel prices at the bowser, pay for it. Even with the discount, they can be dearer than independents.

Yes spindoc, the rot did start back then and has almost been aided, rather than opposed by SUCCESIVE governments.

I was working for the hugely successful and new concept retailer, Pick n Pay back in 84 and at that time the retail market for basics, bread and milk were regulated.

They PNP argued that it was not fair for them to make so much money from the likes of bread, when all they did was bought and sold it.

It was they who introduced the trend, whereby the bread was delivered, then stacked on the shelves, then the returns removed, all paid for by the bread companies, as PNP never at any point, other than at the check out, handled the bread.

It was they (in Brisbane at least) who started the discount war.

They also had this idea, not sure if it was theirs or not, to rent out their shelf space, a practice that is now common in the big two. In fact, they must be close to a negative rent situation by now, whereby their rental income from suppliers, pay their land lords rent.

I remember back in 84 when Coke had a huge display, very prominent and they paid $150,000 for that space, I can't remember for how long.

I also remember the grocery manager telling me that they sold baked beans for one cent per can profit, but hienz paid huge rent for the space, which allowed them PNP to sell that cheap.

It's strange how successive governments have been hell bent on stopping media domination, yet allow such domination of retail + by the big two.

Small retailers no longer have a chance, and in fact, the mail is that IGA are on their knees, thanks to the milk war and pertrol discounts of the big two.

To think all this was allowed, in the name of competition, is disgraceful.

Coles, So who is paying for the discounts ?

Everyone except Coles !