I saw an ad today about Woolworths pet insurance with the usual "we will beat any quote" we come to expect from these jiants of the retail world.

As they have obviously obliterated the retail sector, including liquor, fuel and hardware and having the sights firmly on pharmacy and gold lotto, is there any small business safe from these ruthless corporate monsters who seemingly go about their quest for 100% market share with governments apparently unable, or unwilling to intervene.

In my shire alone, Moreton Shire, we have less than 400,000 people yet we have at least 20 Woolworths which means there's one for every 20,000 people, there's Coles as well.

It's a joke that has no end in site.

Yes it is interesting that the US is criticised for being corporation friendly, but they have anti trust laws, that stop monopoly type operations, & stop companies like our big two getting any where near the market share they have here.

Butch, Woolies were flogging 'Leg Hams' whole and half at $5.99/kg this week. The best price elsewhere I saw was $6.99, that was at the 'Big Butcher' how do you compete? Milk $2/2lt cheap bread $0.85c. Then everything else is over priced. The other day a product was $8.99 on the shelf, I was charged $9.99 at the checkout (Woolworths) well after a price check the girl at the desk wanted to give me a $1 refund, not for this little black duck. "What's your overcharging policy?" says me "Oh, what do you think it is?" says her. "If you overcharge, then the product is FREE!" I got the goods and 10 bucks back. I get a lot of things from Coles and Woolworths for free that way.
A tip, you must actually pay the higher price first before you can get it for free. You know from our previous discussions I actually support the small retailer, not easy, Old Sam down the road opened his F&V a half day yesterday.

Paul, the wholesale price on leg hams in QLD was $6.20/kg. Lean trim for mince is now at around $7 per kg, The big two sold hams for $5.99 and mince fir about the same, so if the tactics of the big two is not 'preditry pricing' what is it?

They are ruining small business, as newsagents are now unsaleable, where once they were a licinse to print money.

The big two want pharmacy and gold lotto. This will be the last straw as they already sell sushi, pizzas and no doubt will have a subway style sandwich bar in the planning.

I know the percentage they pay in meat wages is around 8% of sales, whereas small butchers are around 18%. all governments appear willing to allow jobs to be slashed.

rehctub, if things are genuinely cheaper at the supermarket then why does it matter if small retailers can't match them? The better small shops will compete on range or convenience, and the rest won't be missed.

Sounds similar to the Japanese tactic years ago.
They go into a market loose money with very low prices, when to competition is obliterated they then screw you on the prices.

Also Asians generally used to expect to make there money back after 10 years whereas Western people want to make there money back much quicker hence they have a higher pricing policies.

Phillip, most commercial retail leases are five years, with no option, so that's why they look to getting their money back in a couple of years, lack of security.

Aiden, it matters a lot. Many local charities and events suffer simply because the small business owner also used to have kids attending the local schools/sporting events. Your local hardware owner is one example of a small family run business that has been obliterated by the big two.

The other critical fact is that most small retail businesses have a much higher staff cost to turnover ratio, so that means less jobs to go around and, given the big two are continually finding ways to reduce staff, that something that should bother you if you have children, or grandchildren, simply because they won't have the same opportunities we did as kids growing up and entering the workforce. Think about it!

Butch, the following list might help explain some of the favorable treatment big business gets from the LNP and Labor.
These people are not in the business of giving away money, they want something with a profit margin in return.

http://www.abc.net.au/news/interactives/tables/aec-political-donations-table/

Big Business will maintain its control of the big two in government whilst ever they are able to make so called "political donations". They will tell you its money well spent.

Coles found advertising frozen bread as "fresh"
Coles fined for advertising imported product as "Australian"
Coles fined $10m for squeezing suppliers.
Coles gives Paul1405 product for free, for trying to rip him off!

Woolworths the 'fresh food people' fined for selling out of date product.
Woolworths using bully tactics against suppliers.
Woolworths gives Paul1405 product for free, for trying to rip him off!
Just a few big news examples in a very big list, of criminal activity by the big two shonks!

Butch, why don't you apply the principle of 'Margin Maintenance' the big two do and it works well for them. This is how it works, on product 'A' our traditional margin is say $4, so when it retailed for $10 the wholesale price was $6, $10-$4=$6, BUT if through competition from the other big retailer I am forced to set the shelf price to say $7, the new wholesale price is now $3 being $7 less my traditional margin of $4. It the shelf price should go even lower to say $5 then the new wholesale price is $1. As a big retailer I am very happy with this new arrangement, matter of fact, as the shelf price falls sales increase! Even more profit! Do you see a problem with this arrangement, I can't. Because if you do I will cut you from the supply list, and that's curtains for you. LOL

Paul, the only way you can reduce the wholesale price is to pay the supplier/producer less. Besides, if you do drop your price, and sales do increase, where do you think the increased sales come from?

There is a case being herd for extended trading hours leading up to Christmas. The thing is, there is only so much money to go around so, if one sector increases it's sales, it's at the peril of another, be it repairs and maintenance, insurance/investment, white goods/electronics, cars, boats, holidays/travel or even savings. In order to spend more on one thing, one needs to remove spending from another. In fact, our present government is experiencing this right now, as there are insufficient funds to service all our needs, let alone our wants.

As for accepting/demanding free goods due to company policy, I refuse to do that simply on moral grounds. You must remember, Woolworths and Coles don't wear that cost, it's usually the staff first in the form or cuts to numbers or hours, then it's the share holders. So remember that when you take your next free gift.

I notice now you can go to a fast food chain and place your order and pay without speaking to anyone, while this may seem like a great idea on the surface, it's going to cost even more jobs and, considering the big two either own most of these outlets, or have them in their sites, the result is going to end in tears. You can even draw fuel without dealing with anyone.

More evidence the costs in doing business in Oz is out of control.

Hasbeen>> it is interesting that the US is criticised for being corporation friendly, but they have anti trust laws, that stop monopoly type operations<<

Hasbeen, in Canada they had the mass merchants going into malls and then discounting prices in a food segment until the local opposition went broke. The laws changed which meant that any discounts lasting for longer than a week had to be done nationally in every outlet they have.

So the strategy of discounting vegies or bread or meat in one shopping precinct until the opposition closed their doors is dead. Small business has thrived in Canada since the laws were invoked.

sonofgloin, I was in a butcher shop when similar laws were introduced here in QLD. So what the supermarket did was run pomotions like, spend $30 or more on meat and get a further 8c/l off your fuel. They did the same for bakery and fruit/veg. They are ruthless.

Another silent move they are no doubt working on is outsourcing their packaging over seas. My tip is it won't be long before most items are packed off shore. At present they are placing most of that burden onto the suppliers but even they will have to give in at some point as costs continue to increase and margins continue to be squeezed.

I read somewhere recently that Woolworths is the largest holder of pokie licenses in our region, so that revenue is further protecting their business from failure. Meanwhile, our governments just sit back and observe.

I saw an interesting topic discussed on 'big ideas' with one suggestion being that individuals who head corporations also be accountable. Because the recent $10 mil fine to Coles was paid by the consumer and share holders, not this who made the call.

That's interesting Rehctub. I don't read any of the bumph that lands in my mailbox, & don't go near shopping centres any more often than absolutely necessary, so did not know the story of these special fuel discount rates.

I had wondered why the big two were pushed into giving up their 8C per litre fuel discounts, & now I know. Good to see the pressure from the little bloke has worked.

Working on the use it or lose it principal, I buy my fuel, milk, bread etc. from the local independent servo. I may pay a little more, but I save at least one 50Km return trip to town, so it works OK.

Unfortunately our area must be considered a low social economic area by the big 2. The fruit & meat are of lower quality, although I don't know about the price being lower. The local independents have gone the same way, so after 20 years I have deserted my local town, & shop on the city fringe.

The small traders don't help themselves. The computer shop had a sign on the door saying "Back in 5 minutes". In the next 2 hours nothing changed. That was the last straw, I needed ink. I now turn left & drive towards the city, not right to the country town.

The laidback country lifestyle is great, but there must be some service too. The country town has lost me.

Butch, I wasn't joking, 'Margin Maintenance' as they like to call it is exactly what the Big Two are doing. Coles run a thing called 'Down Down' and Woolworths call the same thing 'Cheap Cheap'. How it works is simple, if normally the product sells for $10 and the retailer makes a $4 margin, giving the supplier $6, if the product becomes a part of this so called "price promotion program" and is dropped to say $7 by the retailer then the margin demanded by the retailer is maintained at $4, so the supplier only get $3 Woolworths and Coles can't loose!
Any supplier who tries to buck the system, is threatened with all sorts of retribution. After all we must all be team players when it comes to these two big shonks. This will kill small retailers and suppliers and they don't care one bit. There is evidence that they are actually adjusting invoices to take this into account, in one case an invoice was underpaid by $2.5m.